Investing in 2012 not for faint-hearted, expect volatility

It was a sea of red across trading screens. The markets gave in at the final leg of the session. The Nifty ended with a 136 point loss losing over 2% and the Sensex saw a 405 point loss and shut shop at 17,196.

In an interview with CNBC-TV18, Ved Prakash Chaturvedi of L&T Finance Holdings; investment analyst R Balakrishnan and Prakash Diwan of Asit C Mehta Investment, spoke about their reading of the market situation and the road ahead. Below is an edited transcript of their interview on CNBC-TV18. Also watch the attached videos. Q: How much of today's fall do you attribute to global pressure? Chaturvedi: There are four influences broadly happening in the market and we have to analyze all four. Firstly, it is the local situation with respect to the fiscal situation, inflation and hence the impact on interest rates. Second, it is the global situation. Flying oil prices and otherwise the situation in Europe and liquidity thereof. Third is the political situation in this country and last but not the least, earnings expectations coming out towards March-end.
My sense is that there was some initial disappointment with the Budget. There was some initial disappointment with the fact that with the kind of subsidy numbers that we are talking about some understatement of subsidy numbers. In fact, there would be continued pressure on interest rates especially if oil prices don