PN Vijay sees mkts touching old levels soon

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PN Vijay sees mkts touching old levels soon

Portfolio Manager PN Vijay feels that one should be cheerful for the next couple of days as the markets would be back to some sort of levels. The evitable crash in May, losing about 6-7% very quickly, according to him, had two components—fundamental and sentimental.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Neutral to positive best way to look at ADAG-RIL truce How to trade in your favourite stocks/sectors now? After a turbulent week, what lies ahead for mkts? Mkts see sharp intraday recovery: Is pullback sustainable? 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 Reliance Infra BSE | NSE 01/06/12 Are Mutual Funds betting on Reliance Infra? Other Stocks in this news Reliance Capital Ventures | Piramal Healthcare | Abbott India | Ranbaxy Laboratories | Godrej Consumer Products | Britannia Industries | Colgate Palmolive (India) | ICICI Bank | Bank of Rajasthan | Jaiprakash Associates |

The markets though on Friday recovered all previous losses, but didn't manage to close in the green. Portfolio Manager PN Vijay feels that one should be cheerful for the next couple of days as the markets would be back to some sort of levels. The evitable crash in May, losing about 6-7% very quickly, according to him, had two components-fundamental and sentimental.

Here is a verbatim transcript. Also watch the accompanying video.

Q: Do you think we are done more or less with the May correction or can't be sure yet?

A: We had an evitable crash in May losing about 6-7% very quickly. I think this had two components to it. One portion was based on fundamentals being that the sovereign default risk in the entire European Union was staring everybody in the face and people were questioning whether the growth story globally was being stunned or being derailed that was a very important issue for markets and nobody can say that markets should survive such a big issue.

On the other hand sentiment took over and then we had tremendous selling which I thought was induced by sentiment on the euro as a currency on markets, commodities etc. I am sure that the second leg will recover which would mean that the Indian index would probably go up about 100 points or so from the Friday close.

But, after that, we need clarity on whether the European efforts that are being taken are adequate and will ensure that the austerity does not stymie growth in EU.

So the next few days we should be cheerful and back to some sort of levels after that the big questions would remain unanswered.

Q: How will the market take the news of the Ambani brothers chiseling out some kind of agreement?

A: Except that the markets open at 9 in the morning and not 9 in the evening, I would say champagne bottles out. It is clearly a great news for the market because you have five-six companies which are index heavy weights, Reliance, Reliance Communication, Reliance Infra, etc. and apart from the speed with which the two Ambani's sorted it out.

Clarity with which the memorandum of understanding (MoU) was done, the previous MoU was so complicated. Mukesh Ambani has emerged as a winner out of this war. There is no doubt about that, but the fact has been gracious. At this point of time, all action would be on some of the Anil Ambani stocks because they got beaten out of shape after the Supreme Court verdict. I would not be surprised if you see a huge bounce up in shares like Reliance Infra and Reliance Capital.