Retail investors still cautious about markets: Emkay

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Retail investors still cautious about markets: Emkay

The markets, both domestically and globally, are in a consolidation mode, says Krishna Kumar Karwa, Managing Director, Emkay Global Financial Services. However, there are no reasons for the Nifty to go down to 4,500-4,600 domestically. “The crack in the market if any will only come from global cues and global flows.”

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After an extremely dull and lacklustre session yesterday (on Tuesday), mirroring their global peers and trading in an extremely narrow range, the Indian markets picked up slight momentum today.

The markets, both domestically and globally, are in a consolidation mode, says Krishna Kumar Karwa, Managing Director, Emkay Global Financial Services. However, there are no reasons for the Nifty to go down to 4,500-4,600 domestically. "The crack in the market if any will only come from global cues and global flows."

Further, Karwa says investors are disappointed due to delay in the fertilizer policy. "Also, retail investors are still cautious about the market."

In an interview with CNBC-TV18, Krishna Kumar Karwa, Managing Director of Emkay Global Fin Services, spoke about his reading of the market.

Below is a verbatim transcript of the interview. Also watch the accompanying video.

Q: One word on the big issue that is opening today-- NMDC . What is your call there?

A: I think valuations round Rs 300-350 range from an investor perspective is looking for listing gains. This is not the issue to subscribe for, but from a long-term perspective, this is a good investment opportunity. So we are expecting institutional support for the issue and the retail investors' response maybe slightly lukewarm.

Q: What are you thoughts on the market? Do you think we need to be more range bound like this for a few more weeks?

A: After a rally of almost 5% post Budget, the markets are in a consolidated mode. After four-five weeks of good run, the global markets are also consolidating. So now the markets are looking for global cues for further up tick at least as far as domestically the markets are concerned. So we are in a consolidation phase.

Q: Is there any risk of the market breaking the floor put in place or going all the way back to 4,500-4,600 kind of zone?

A: Domestically, there are no reasons for markets to go down to 4,500-4,600. There is no news flows expected on the domestic environment, which can possible lead to a crack in the market. So the crack in the market if any will only come from global cues and global flows. So I don't think 4,500-4,600 should happen at least in the next few months.

Q: Conversely, do you think Nifty can take out its top of 5,200-5,300 through earnings? Do you think in the near-term that remains a ceiling over the markets head?

A: Yes, what can possibly take the markets to a new range is once the earnings season starts in the second week of April and guidances from companies on that front and we are also expecting the 3G auction where we are expecting some Rs 35,000 crore of realizations.

Once that comes in, and that is a major component of your Budget expectation then there could be a positive rally in the market. Till you have first predictions of the monsoon in the first week of May, there are no negative flows as far as the markets are concerned. Slight positive global cues can take the market beyond 5,200-5,300.