Nifty may bottom out at 4600-4700: IL&FS' Vibhav Kapoor

Excerpts from Business Lunch 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

In an interview with CNBC-TV18's Mitali Mukherjee, Vibhav Kapoor, IL&FS said, there could be more more downside pressure on the market. "It is difficult to say how much it can fall further, although I would think that some positives are developing for India," he added.

According to him, the Nifty should get a temporary bottom somewhere around 4,600 to 4,700 and some rally there onwards.

Also read: Don't see more than 10% downside hereon, says Jhunjhunwala

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.

Q: Does it look like there could be more by way of downside pressure on this market?

A: Yes, there could be. All global markets have got into a panic mode, since the last Fed meeting. This not only includes equities, but also commodities, precious metals. There is flight to safety, flight to the dollar, flight to US treasuries.

When this sort of panic situation develops, most people tend to act in haste and without thinking what is happening. Rationality goes away. And then it becomes very difficult to say where it will end.

Q: On that point you made about panic, can you sense that some of that is playing into our market as well because today the blue-chips have been under pretty severe pressure?

A: Definitely. It is permeating all markets globally and India is not exception to that.

Q: How long before you think this entire process will work itself out? Now, the parallels are being drawn more severely with the 2008 example, and how much more this market could stand to lose?

A: It is difficult to answer that question. Panics have been irrational. Therefore, it is difficult to estimate what irrational actions can do. So, it is difficult to say how much it can fall further, although I would think that some positives are developing for India. For example, commodity prices have started to fall of very sharply, copper has really come off 30% in the last few days, oil is coming off.

So, at some point of time, this should lead to a situation where India should start to perform better than the rest of the market. And that might mean that if the rest of the market goes down 20%, we may go down significantly less than that or we may even start to bottom out earlier. But where that level will come is a big difficult to say.

I would be more worried about the global situation. It is going to take long time for things to start moving up again. So, you could be in a situation where the market does bottom out at some level and then remain in a lower range for a long time to come.

Q: We are entering that crucial October phase where the markets usually end up with a very big outcomes in either direction. At this point, what would you be positioned for, for much more downside risk i.e the market breaking the lows it has made this year or do you think because of how oversold we have been for two series now the market could actually surprise and bounce a bit?

A: I think and this is more a guesswork than anything else. I would think that somewhere around, worse say, 4,650, 4,600 to 4,700 you should atleast get a temporary bottom. And some rally there onwards.