Window of volatility remains open: Envision Cap

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On Wednesday, the Nifty closed at 4, 462 up 105 points, while the Sensex shut shop at 15,308 up 375 points. Asian markets are all trading in the green. Crude is currently trading up 0.18 cents at USD 72.33 a barrel on the Nymex.

 

Nilesh Shah , MD and CEO, Envision Capital , said the window of volatility continues to remain open for the markets. Global cues will continue to affect our markets, he said, adding that the worst is behind us. The markets could once again head towards the psychological mark of 15,000, he added.

 

Excerpts from CNBC-TV18's exclusive interview with Nilesh Shah:

Q: How are you feeling, is the worst behind us or do you think the window of volatility is still open?

 

A: Yes, I continue to believe that the window of volatility is still open because clearly there are several developments across the globe, which will continue to impact our markets on a day-to-day basis but having said that I guess over the short-term probably the worst is behind us and we probably could be going back towards that important psychological level of 15,000 if at all but otherwise I clearly believe that the worst is behind and for the next few sessions we seem to be headed for very strong moves.

 

Q: You said 15,000 did you mean 16,000?

 

A: No, I am saying that on the lower side if at all so if we move from 14,700 to about 15,300, I think potentially we could probably go back towards 15,500-15,600 and if at all there is any global volatility which impacts us maybe we might be headed towards 15,000 but I think over the next few sessions, maybe over the next few weeks I would not be surprised if our markets make a new high.
 
Q: What is concerning you most about the global situation at this point, is it that there might be a liquidity crunch or do you think there are growth issues that the market needs to take cognizance of?

 

A: At this stage growth does not seem to be kind of an issue, probably most large economies across the globe are growing at a pretty strong pace and they seem to be sustaining that pace. Asia is the big engine of growth for everybody across the globe.

 

I really do not see growth as a challenge, I think liquidity also is there in abundance and there is huge amount of flows which is happening.  I don't think that liquidity is going to be the big challenge but it is more about how investors perceive risk and whether that risk emanates from sub-prime or from changing interest rates or from crude oil prices making a new high, it could be anyone or a combination of all of these which could change perceptions of risk and lead to repricing and so that itself will continue to be the important risk and challenge for the markets which in turn could influence liquidity flows in the short-term to medium-term.