According to Prakash Diwan, Networth Stock Broking, the situation is going to worsen before things start to improve. He tells CNBC-TV 18 that markets may start to normalize, and that investors will be on the look out for positive triggers.
Below is the verbatim transcript of his interview with Latha Venkatesh and Tanuj Singhal on CNBC-TV 18. Also watch the accompanying video. Q: What have you made of this big fall we had had on the index and at 5300 on the index, what would be your call?A: I think the fall that we have seen yesterday has of course been precipitous thanks to a lot of factors. Given the fact that we still continue to have a lot of counters where we have these leverage positions that could have dramatically changed if things really take off in an unfavorable way on the double taxation avoidance side. And the rest of course has been done by the technical calls or margin calls; that would have come once the market started falling down so sharply.
So, what we are seeing today is probably a little bit of semblance of normalcy coming back and possibly people will want to wait to see some positive triggers. But mind you the liquidity issue from the FII side continues to haunt us because there is not much of India attention specifically happening, especially the US markets looking up quite smartly in the last few sessions. So you have had these 8-10 sessions of outflows from the FII side and that continues to keep everything under a link. Q: The Mauritian issue has not been settled one way or the other and the statements, if anything, we are getting sooner or later those tax advantages at least for some of the money coming from there is going to get trimmed. Do you think that the markets are therefore reacting to other fundamental news as well? We didn
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