Hold up your stocks! Market may fall 10% say expert

Moneycontrol Bureau

It was a day marked by volatility. The market recovered from a gap-down start, only to see fresh pressure from the earth quake and subsequent tsunami fears. The Nifty see-sawed between negative and positive terrain before closing flat.

The BSE benchmark fell 44.44 points or 0.26%, to close at 17,199.40 and the NSE benchmark slipped 16.75 points to 5,226.85.

Tsunami may not have hit Indian Ocean but is sure to strike market if the government does not change its flip-flop attitude towards policy action. Right now the market is weak and may continue its downtrend bogged down by macro pressures, warn experts.

FMCG stocks hit new high, is it still a good time to buy?

On the back of negative global news and confusion over issues like GAAR, the market may even slip 10% from current levels, says Amit Dalal, Executive Director, Tata Investment Corporation.

However, Dalal is also confident that with growing sentiment and belief that we are seeing the worst with the fundamentals and earnings degrowth, this year will perhaps now be more on a positive trend for the next year. "I think we will close the year with 5-6% earnings growth on aggregate is what rough estimates are and next year maybe slightly better," Dalal elaborated.

Echoing a similar sentiment, Sudip Bandyopadhyay, MD and CEO, Destimoney Securities points out that Indian market may suffer if liquidity dries up on the back of Euro crisis.

"Indian market has been driven predominantly by liquidity in 2012 and if that liquidity starts disappearing I am sure our markets will start suffering. So we are very cautious," Bandyopadhyay adds.

Nasrin Sultana

nasrin.sultana@network18online.com