Sensex may find support at 17900: L&T Investment Management

It was all about the credit policy today. RBI's 50 bps repo dose and somber reading of the inflation situation sent shockwaves across the market.

In an interview with CNBC-TV18's Udayan Mukherjee, Sanjay Sinha, CEO, L&T Investment Management says, the downside will get limited. According to him, the market will find support around 17,900 and bounce back. Also read: RBI Guv has Dalal Street bulls running for cover Here is a verbatim transcript of the exclusive interview with Sanjay Sinha on CNBC-TV18. Also watch the accompanying video. Q: Aside of banks, the two other rate sensitive sectors, which have reacted very sharply today, are the autos and the infrastructure pack. If you had to buy this decline, which of these two clusters would you have higher conviction in? A: I think the auto would have probably a little more conviction than the infrastructure. I think auto is reacting to both the events together, the facts that the rates have been hiked and also the reports that the auto numbers are plateauing. Going forward, I do not expect the auto sales numbers to be under very much too much of a pressure. My conviction also comes from the fact that I have a point of view that the commodity prices will not remain firm for too long. Therefore, autos will be a beneficiary of that going forward. Why I am a more guarded about infrastructure is because we have had a long period in which the award of infrastructure projects had got stagnated. Now, that phase has started. But I am not very enthused this new phase of awards of infrastructure projects because the aggressive IRR at which the companies are bidding for these projects. Given the fact that we are in an extremely high rate environment and the infrastructure projects are fairly working capital intensive, it makes me a little more guarded about infrastructure. Otherwise, as a sector it looks attractive on a longer term not maybe on the medium-term. Q: How much downside do you see for this market? Last month, we had the market, which was very resilient in the phase of some bad news, do you think that might change or do you think downsides will be restricted? A: No, the downside to a large extent will get limited. Post budget, the market had touch 17,900 points and bounced back from there. Even if we see some more correction in the market, somewhere close to that level, the market will find a support and bounce back.