City Index sees investors exit risk stocks, sit on cash now

The Greek prime minister's call for a referendum on the bailout package triggered a global sell-off, leaving India battered as well.

In an interview with CNBC-TV18, Joshua Raymond, Associate Director - Chief Market Strategist at City Index talks about all that is bothering European markets today and what to expect in the days ahead. Below is an edited transcript. Watch the accompanying video for more. Q: Why is there so much of nervousness across Europe today? Do you think after two days, it will stabilise or unless there is more information from the Greek front markets will remain edgy?
A: I am slightly nervous at the fact that European markets have come off so quickly in the last two-three trading sessions. That comes off the back of the best trading month of October that we have seen since July 2009. Whilst the start of the move down was more about profit taking than anything else, the Greek move to hold a referendum has surprised quite a few. It does cloud the picture again for Greece as to how things can progress and whether it brings closer an eminent default for the country than the actual agreements that were made at the EU Summit in Brussels last week.
At the moment, the severity of the losses seems to be escalating. If you look at investors at the moment, they are taking out their money from risky heavyweight stocks like miners, the banks and they are putting them into safe haven asset plays. The dollar index gained over a percent today. That tells you that investors are not putting their money in risk anymore. They are taking it out and trying to sit on their cash after a strong month considering the uncertainty that we are seeing over the last 24 hours. Q: Should the strategy be to exit any of the gains that one has made in this October rally?
A: I wouldn