Mkt to drift 3-5% lower for next 10 days: JV Cap

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Mkt to drift 3-5% lower for next 10 days: JV Cap

Sajiv Dhawan of JV Capital Service said, “We need is some global stability. There still is the fear of the US markets with the sub prime crisis receding. Unless that disappears, the market at best will be in a range of couple of 100 points. They may continue with that negative bias drifting lower by another 3-5% in the next week or 10 days.”

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Steel Authority of India |

Sajiv Dhawan of JV Capital Service feels there is still a lack of positive news flow and a lot of caution in the markets and sees no real positive fundamental news flow coming in the short-term. He said if there is no positive news flow and news triggers, then the markets will tend to drift as long traders and speculators unwind their positions and slowly give more strength to the short sellers. Shorts have the upper hand in the moment currently, he said.

Dhawan said "We need is some stability globally. There still is nervousness and fear of the US markets with the sub prime crisis receding. Unless that disappears, the market at best will be in a range of couple of 100 points. They will probably continue with that negative bias drifting lower by another 3-5% in the next week or 10 days."

Dhawan believes that crude prices have been factored in and unless it falls below USD 100 per barrel he does not see a bullish markets. He also feels that Interest rates hikes are not going to change anything in the short-term. He added that the next 3-6 months could be difficult for any sector, which is linked to the government and its policies.

He views banking as the main heavy weight sector, which after its 30% bounce from the lows has now corrected 10% more. The steel sector according to him has been under pressure due to government intervention, price control and problems that companies have in passing on the higher cost they face due to the global price rise. Otherwise, he said, Tata Steel and Steel Authority of India Ltd would be positing much higher profits than they have been.

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