Market delinked to US woes, hit by home issues: Anand Rathi

The US market ended lower for the second consecutive day on the back of US shutdown. However, a similar move in Nifty is unlikely, says Sandeep Shenoy of Anand Rathi Financial Services.

Also read: US may not shut down for long; buy market on dips: Aberdeen
Speaking to CNBC-TV18, Shenoy says that the Indian equity market movement is more related to the currency performance and policy moves than the policy logjam in Washington. Below is the edited transcript of Shenoy’s interview to CNBC-TV18. Q: How are you looking at the way the global clouds are gathering? Do you think we are going to see some very sharp fall before the market and the US authorities give us reason to buy?
A: I do not think it is going to have too much of a bearing anything other than sentiment-wise, because for quite a few weeks we have been more or less delinked on the negative side. We have been getting our own pressures.
We saw 5100, we saw 6100. Those moves what we have witnessed in our market more or less had a huge amount of connection with our currency, our policymaking and our political scenario and not as much as what is happening in US. So, I think that phase is going to persist for some more time. Q: What do you think about financials? There were technical guys who were saying that perhaps it will not underperform the Nifty hereafter. Do you think all the bad news is priced in?
A: Something like a 23 percent or 25 percent market cap whichever way you view it; if that starts underperforming then we have a serious problem for the entire market. That means some other sector has to do some heavy-lifting. It could be IT, auto or pharma.
I do not think any of the other sectors have that much headroom to do heavy lifting to take care of the underperformance of the Banking, Financial Services and Insurance (BFSI) or the financials.
Yes, there could be churn and heady days and the premium valuation zone of private sector banks could be a thing of the past and they could converge or maybe PSU banks could show some kind of an uptrend. But if we think that Bank Nifty is going to underperform then we have to literally revisit our thesis on which way the Nifty could be heading, because the headroom for other heavyweights is very, very meagre.