Richard Gibbs, global head, Macquarie Securities foresees a temporary relief-rally as we head towards the tail-end of the year. This comes on the back of some positive news flow emanating from Europe.
"There is a potential for some kind of relief rally although we are still going to be heading towards punctuated periods of disappointment. There is a lot of expectation built up on what is happening in Greece and Italy," he said. Opining on the Indian market, he said that India is in an 'interesting' position and is well placed as the central bank has signalled easing on the tightening cycle. "If developments continue to be sporadic in relation to the euro area and risk aversion, then it will be certainly possible that we could see the RBI considering interest rate cuts as early as March of 2012," he said. Gibbs is bullish on utilities stocks and banking too, on expectation of Reserve bank of India easing monetary cycle going ahead. Below is the edited transcript of Gibbs's interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying video. Q: Some people have pointed out that there is a potential opening up of a Santa Claus rally going into the tail end of the year. Would you agree with that? Is it looking like likelihood for markets? A: Certainly yes. There is a potential for some kind of relief rally although we are still going to be heading punctuated periods of disappointment. This because there is a lot of expectation built up on what is happening in Greece and Italy. So, we will get periodic bouts of that volatility and disappointment coming through. Having said that it will certainly favour markets with low levels of debt holdings where we have got potential for defensive sectors to rally as we move towards the end of the year. Q: Last week was quite volatile. What's the mood right now? Would you say that people are willing to take on more risks now with the developments in Italy and Greece or are people still confused and you can still sense some risk aversion? A: They are still extremely sensitive to risk there is no question about that. The sensitivity of risk is at almost an all time high around the world. Investors are very keen to preserve capital. But they are looking at opportunistic trades that they can undertake towards the end of this year. But having said that, I donDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
