SENSEX NIFTY
Aug 30, 2012, 11.55 AM IST | Source: CNBC-TV18

Nifty may fall to 5000-5100 in Sept, warns Baliga

Market analyst Ambareesh Baliga is worried of further sell-off and cautions that Nifty may slip to 5,000-5,100 level in September.

Indian equity benchmarks dropped for the fourth consecutive session on Wednesday on the back of consistent parliament logjam.

The downtrend was despite the constant inflow of foreign money. Nifty closed below the 5300 level - for the first time in last three and half weeks.

Market analyst Ambareesh Baliga is worried of further sell-off and cautions that Nifty may slip to 5,000-5,100 level in September .

"We have been talking of 5,100-5,200 for a while, but more important than that is the broader market, the midcap and the small caps where the carnage is. That is what really hurts the Indian investors the most and we will still see further lower levels," he elaborated.

Below is the edited transcript of Baliga’s interview with CNBC-TV18.

Q: What is the sense that you are getting about the month of September? Would you worry about a further sell off or do you think global monetary policy will keep things afloat?

A: I would be surely worried. We have been talking of 5,100-5,200 for a while, but more important than that is the broader market, the midcap and the small caps where actually the carnage is.

That is what really hurts the Indian investors the most and we will still see further lower levels. Nifty wise we could see levels of 5,000-5,100, that looks quite possible in the month of September. But, on the broader market the cut could be still sharper.

Q: Where do you see Jaiprakash Associates stabilize now and how should an investor approach the stock because the debt issues have not cropped up over night, it has been going on for so long?

A: There could be some more pressure because of yesterday’s news. It is possible that we could see levels of Rs 58-59, but the development is much better than in fact defaulting on the FCCB is going ahead. I suppose raising this money surely is a positive if you are talking of at least the longer term perspective. In case we see lower levels closer to Rs 58-60, it is a decent buy.

Q: What is sentiment like now, were people beginning to get interested in the early part of August because of the way the market was moving and has that been spoilt to some extent by the collapse of the last 5 days?

A: In the beginning of August we saw at least a few retail investors and HNIs showing some amount of interest after a long time, but that’s been completely punctured. With the carnage seen in the last couple of days as far as the midcap and small caps are concerned, I don’t think these people will come back to the markets for a while.

Unless you see the markets holding on at these higher levels at least for a couple of months, don’t expect the Indian investors to come back. It is only going to be institutional play.

Q: What do you do with some of these NBFCs (Non-Banking Financial Banking Companies) which have started correcting again, names like SKS Microfinance and Manappuram?

A: I track SKS quite closely and because of that shift to T2T (trade-to-trade), we have seen that correction. It has again come to those levels where it becomes a buy. I would look at buying in that range of Rs 95-100 because with a change in the scenario for the microfinance companies, this company will be the biggest beneficiary. I still have a price target of about Rs 140-145. So, Rs 95-100 is a good range to start buying again.

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