Speaking to CNBC-TV18, Ajay Srivastava, chief executive officer at Dimensions Consulting says that the downside in market is limited due to liquidity. According to him, the rally is however not backed by fundamentals. Nonetheless, market confidence at a high, he says. In fact, the performance of the markets in March was much better than expected.
Highlighting the opportunity that investors have at the market, Srivastava says that domestic investors are highly under-invested in equities. Below is the edited transcript of the interview. Also watch the accompanying video. Q: March was not a good month for the market, is April likely to be better or still subdued?
A: Look at the other way round, March compared to what we had expected turned out to be much better because the correction that was supposed to have gone severe and deeper, it recovered back very sharply. The momentum was there in the market in spite of the market falling, with lots of buying enquiries coming in. So what we had thought of March as much worse actually came out much better. Therefore, one would tend to believe that although market had a bit of a deep correction and then a recovery but on the overhaul the confidence in the market has gone up.
Fundamental story continues to be very depressing, there is no doubt about it, the BoP numbers which came out were very depressing, the GDP may perk up a bit because of March effect, but the overall fundamentally story is very weak.
On the other hand, the confidence at the stock market is very high at this point of time, people are now trying to enter again in the market. In fact, after this correction, we saw lot of value buying taking place. Q: Do you expect the market to see well south of 5,000 levels anytime in the next couple of months?
A: The reason I am saying the downside is limited is because the wall of liquidity still continues to be good and the European Union is going to pump in another close to a trillion dollar in the market in the next month or so, which means that the liquidity flow into the system remains strong, no need to sell out.
The critical issue is, will people who bought in the first quarter, sell out? Seems unlikely. Market is terribly under-invested domestically. We don
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
