Nifty may sink to 4500, exodus of FII scary: Arvind Sanger

India no longer holds a magnetic charm to the foreign investors. There is a growing worry that scanty inflows of FII may pull the market down market. Arvind Sanger of Geosphere Capital also feels that FIIs may exit India on any capitulation in market.

In an interview to CNBC-TV18, Sanger warns that the Nifty may even tank to 4500. Pegging growth at 6.5% in 2012, he points out that India's policy action is getting hard to play. "I think any rally is very fragile given all the global headwinds going on. In India, there are enough reasons of not getting too excited about a year-end rally but trying to discern more fundamentals for the next three to six month to try to position," Sanger explains. However, the positive news from Europe may just be the wild card and provide room for a year-end rally, he adds. Meanwhile, Sanger is expecting the rupee to drift lower to USD 55 per dollar levels. As an investment strategy, he is not bullish on metals and mining while infra, realty, cements and banks don't look promising. Also read: Market may test new low in 2012, says Sangeeta Purushottam Below is the edited transcript of his interview with Udayan Mukherjee and Sonia Shenoy. Also watch the accompanying videos. Q: Last you were holding out in the hope that 4,800 would be the floor for the Nifty, did that breakdown to nearly 4,500 surprised you? A: Yes. We are disappointed that we have seen a sharper correction in Indian market than what we had anticipated earlier in the year. There are many causes for what has happened. But the reality is that the market has done much worse. I did not anticipate the significant correction in the rupee. So, therefore, in dollar terms it