Nifty unlikely to fall below 5800 before Budget: IL&FS

After the Fed meeting on Wednesday indicated that a number of senior officials remain concerned about the central bank's bond buying programme, global markets corrected affecting the Indian market and leading to a sharp decline. In an interview to CNBC-TV18, Vibhav Kapoor of IL&FS said that he does not expect the Nifty to fall below 5,800 before the Budget.

However, Kapoor suggests to wait for further correction and avoid holding positions immediately, as the Nifty may fall below 5,500-5,600 post Budget due to global concerns.

Below is the verbatim transcript of Vibhav Kapoor's interview on CNBC-TV18
 
Q: What would you attribute this selloff to? Would it just be a general risk-off that we have seen globally?

A: I think it is a technical correction globally, because the global markets have been running hard for not only several weeks, but several months, so a correction was definitely on the cards. It needed some sort of an excuse to set off and the Fed minutes yesterday, was that excuse. We have also seen some statements from China about curbing down on property, then this eurozone Purchasing Managers' Index (PMI). So, you have two-three excuses for that correction to begin. Right now, I would put it only as a correction and we need to see what happens later on.

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Q: For our market, do you see a substantial correction below 5,800 levels or will we continue to be in that range of about 5,800 to 6,200 that we have been talking about?

A: Right now there is an impending big event, which is the Budget and just four-five trading sessions. So, the market may not fall too much beyond 5,800-5,820 till the Budget, but after the Budget it may be a different story if the global markets continue to correct and we have seen the fund flows beginning to reduce significantly. One could think of a bigger correction after the Budget.

Q: Would it be an opportune time to take some amount of positions in such a correction and possibly select stocks?

A: I think you need to wait for that because there could be a possibility for the market to go down to as low as 5,500-5,600. So, we are still far away from there.

Q: Budget is complicated further by the impending general elections and the pressure on the fisc as well, do you think that the Finance Minister may present a Budget without too many radical measures and that may perhaps disappoint the Street?

A: No, we expect a Budget which will not be disappointing in the sense that the FM will definitely meet his targets of 5.3 and 4.8 percent. What the market will look at is what is behind those numbers. It will analyze and see how realistic or unrealistic they are, so that is going to be the most important variable which the markets will look at. Then, there is a little bit of worry about the Food Subsidy Bill, how much additional expenditure that will entail and how much of that will be factored into this Budget, that will be a very crucial issue.