5360-5370 could be final bottom for Nifty ahead: ICICI Sec

In an interview with CNBC-TV18, Piyush Garg, Chief Investment Officer at ICICI Securities gave his readings and outlook for the market.

He said, "A large part of the correction in a one to two months call has already happened. 5,360-5,370 could possibly be the final bottom for the market for at least a month-two month ahead." Talking about the banking sector in the wake of disappointing SBI results he said, "For the time being the sentiment has turned negative on the banking sector. It will take some time for this sector to recover. Even SBI will remain under pressure for some more time at least till one more quarter of results. Till that time it could be under pressure." Below is the verbatim transcript of Garg's interview with Sonia Shenoy and Anuj Singhal of CNBC-TV18. Also watch the accompanying video. Q: We have seen quite a bit of correction for the market in this month. It indeed looks like there is trend of sell in May and go away is playing out. Going forward what would be the trend or what is the likely trend as we move into the months of June? A: A large part of the correction in the short-term, in a one to two months call has already happened. Another 50-60 points on the Nifty and possibly, 5,360-5,370 would be the final bottom for the market for at least a month-two month forward. At this juncture it might just make sense even for shorter-term players to start buying. Till about 5,550 or 5,620 if it taken out on a closing basis at least two consecutive days then one might see another bout of 100-200 point rally. But, otherwise about 200 point rally from here is very likely in next month or so. Q: What have you made of the earning season this time around and from hereon how do you expect it to pan out because most of the heavyweights if you slice through any sector be it Reliance, SBI, Infosys even metals has not delivered up to the mark. What are you hoping to see in terms of earnings downgrade from hereon? A: Earnings have already been downgraded. Earnings were expected for FY12 to be closer to 20%. The general consensus has now shifted towards 15% or so. There has been a downgrade in earnings specially in the context of interest rate hike have happened in this fiscal year and expected forward also. So possibly a large amount of earning downgrade is also factored in the market and one has to also take a call as to what PE Sensex or Nifty is trading. From medium-term perspective it is trading at a fair value of about 15 forward PE which is a level where medium-term long-term investors should come and start buying. Don't miss: SBI likely to see another 15- 20% downfall: Mithil Pradhan Q: What is the call on PSU banks after the shocker that we had from State Bank of India? A: For the time being the sentiment has turned negative on the banking sector. This is a sector where most of the people have been overweight for the entire last fiscal. It will take some time for this sector to recover. Even SBI will remain under pressure for some more time at least till one more quarter of results. In case things seems to be stabilising or looking positive at that juncture there could be some positive move in SBI. Till that time it could be under pressure. But yes, this large fall that we saw in SBI yesterday and going forward would be good opportunity to buy. I particularly don