See Nifty below 5150 if policy paralysis persists: Baliga

Foreign fund inflows have been the driving force for the market from the past few months. Given the uncertainty on policy front foreign intuitional investors (FIIs) seem to be quite scared of the market now, Ambareesh Baliga, chief operating officer of Way2Wealth said.

Unless there is clarity on the policy front, Nifty won't be able to hold on to 5,150-5,200 levels, he added. "Only if the reserve bank of India (RBI) announces a 25bps rate cuts, the upside for Nifty can be seen at 5,300-5,350 levels," he told CNBC-TV18. Despite the rate cut being a trigger for Nifty to test these levels, he doesn't expect Nifty to sustain above those levels and touch 5,450-5,500 range. "Even levels of 5,300-5,350 could last for a few days and possibly people could utilise that to sell, he suggests.  Below is the edited transcript of the interview. Also watch the accompanying video. Q: Do you expect these levels to hold out 5,150-5,200 or do you think those levels will go in the next few sessions? A: For the time being it could hold on but a couple of questions whether Infosys will break those levels, whether it’s the monetary policy which will break those levels. I think that has to be answered. It is quite vulnerable and surely just because it’s holding on for a day or two, I will not start buying at these levels. I am looking at breaking the 200 DMA and see it going more towards 5,000-5,050. Basically because the FIIs who were driving the markets in the last 2.5-3 months they seem to be quite scared of the market at this point of time because of our policies and unless that support comes there is no way we can hold on at these levels. Q: Where do you think the upside will be capped for the market? A: I don’t think upside can be above 5,300-5,350, that upside can happen if we have 25 bps cut which market has been expecting from the monetary policy. If that happens yes, that trigger can take it to those levels, but it may not be able to sustain much above those levels and go towards 5,450-5,500. I don’t think that is possible. Even levels of 5,300-5,350 could just last for a few days and possibly people could utilise that to sell in case it happens. Q: How would you approach the cement pack now which saw beating yesterday on fears of that CII penalty on cartelisation? A: I think that is going to be a serious charge. We have seen cement companies holding on in spite of the ground realities not supporting it to that extent. Now one should see a very decent correction, which would be inline with the market, so for a stock like ACC or Ambuja possibly we could see a correction of at least another 10-12% more from here. Q: Do you track Max India. The stock is up 8% in the last three days and they are possibly announcing a big deal change today? A: In fact we have been saying that the true value of Max India is about Rs 200 because at the end of the day one needs to do sum of parts and that works out to a levels of about Rs 260-270. So giving a decent discount, it should be quoting above Rs 200. Q: Would you buy anything from this basket, IGL, Gujarat Gas, Petronet LNG and GSPL? A: If we see further fall in IGL to the lows which we saw in the last two-three days, closer to that Rs 170-180 mark, at those levels its worth the risk. Because they have appealed and the way things are, logically their appeal should go through to a certain extent. Possibly we could look at this being applied prospectively and not retrospectively. So from that point of view Rs 170-180 make some sense. Q: Do you expect the IIP numbers to have any great bearing on the market today? A: The expectation is slightly lower than January closer to 6.6%. In case it’s much lower than that, then I suppose that will have an effect before Infosys has an effect in the markets.