Ride market storm with IT, consumer stocks: Ajay Srivastava

Turmoil from the global markets has left a huge dent on our market newsflow. Last week, saw our market lose 5% due to weak news coming from Europe and the US, with broader markets getting the tail-end of the stick. Investor nervousness may continue through the course of this week as well unless, globally, things take a turn for the better.

Ajay Srivastava, CEO, Dimensions Consulting, in an interview with CNBC-TV18 says there could be further downside for our market going forward as global headwinds remain strong.
While he awaits some signs of winds of change, he suggests riding out the storm with IT, consumers and blue chip stocks. Below is an edited transcript of Ajay Srivastava's interview to CNBC-TV18. Also watch the accompanying video. Q: We have lost 7-8% effortlessly, over the last two weeks. Is there more downside?
 
A: The downside is not reflected by Nifty stocks, it is reflected all around the market, which is about 20-30-40-60% down across the board. This is the more relevant part of the market, as far as Indian investors are concerned. However, there is a story there, you stick to the quality names, and the big size names like HDFC, though it may look unattractive, but you can at least address the portfolio losses.
The IT stock pack, consumer stocks, MNC pack and the main line of the HDFC pack, they all have survived through the carnage without a problem. The lessons to be learnt are definitely more downside as you go forward, the headwinds are very-very strong and I think more is going to come from the outside India, which means that the exchange control situation is pretty grim at this point of time and the government has admitted to it.
What is happening in European market tells us that the Europe funding may not available for long. The silver lining, the Yuan bond offering by IDBI was priced very attractively. People who are tracking it say that there is some appetite for Indian debt in the Hong Kong market. However, it also tells you that the UK market a debt market or even the US market is a debt market, hence, for the Indian debt scene the external situation is not good. We all know the fiscal deficit is not good and you have got to stick to top quality names if you have to be invested or want to invest because there is no other place to go in this market. Q: Are you expecting anything by way of positive news from New Delhi as the Parliament session begins tomorrow and which possibly can elevate the market woes a little bit?
A: We are all rarely clutching for straws, so any policy initiative can give us good news. Anything which is going to come out would be good news but I do not think the equity market is looking at it. Equity markets want serious credible cuts in the fiscal deficit, in the government spending on consumption areas which is the social benefit scheme. The problem of spending of the government in the scheme has made the budget and the fiscal deficit untenable.
So far the bond markets don