Pankaj Pandey, Head-Research, ICICI Securities said fundamental damage could be much more for metals, because if the government does not do anything there could be dumping of these commodities coming in, which again could hurt players. “For about two quarters these players are going to witness pain.”

Here is a verbatim transcript of the exclusive interview with Pankaj Pandey on CNBC-TV18. Also watch the accompanying video.

Q: Looking extremely soft for our market. Are you sensing any lack of conviction after vicious profit booking we saw yesterday to go and buy?

A: At higher levels we were anticipating that some kind of profit taking will happen and some more profit taking would happen over the next two-three days, which might take markets to levels like 9,200 or probably lower levels like 8,900. But, we are not going to see a repeat of events that we have seen during Diwali season. And at those levels one can re-enter into the market and probably at that time it will be a bit higher to levels like 12,000 or so.

Q: That would hold for individual stocks too, like commodity stocks; Tata Steel and Hindalco falling quite sharply in today’s trade. Do you think even these stocks will hold their previous lows?

A: Commodities as well as real estate are usual culprits at this moment. But, fundamental damage could be even much more for space like metals, because there is a fear that if the government does not do anything there could be dumping of these commodities coming in, which again could hurt players. Although these players are trying to retain prices by undertaking production cuts, it still remains to be seen whether how long they are able to hold on to this strategy of theirs. However, for about two quarters they are going to witness a pain. 

Q: What have you made about the move in all the infrastructure and construction stocks? IVRCL, GMR, HCC, Nagarjuna Constructions have been holding strongly over the past three-four trading session?

A: On infrastructure side, there is some value buying happening at this moment and we expect that government has a big role to play going forward for these companies. In terms of revival of the economy, I think government needs to boost its infrastructure spending and if there is some positive stance are taken by the government then it will benefit all these players.

Q: At these levels would you advice traders to go long or short?

A: We have advised our customers to go a bit short on sectors like metals, real estate and Reliance pack.