It's not over yet! RBS says market may fall another 5-10%

Blame it on the Greece woes or the very recent Moody's downgrade of SBI, Indian market has been pounded into pulp over the week. Experts fear that this is not the end and market will soon slide some more.

Devesh Kumar, Head of Equities, RBS India is concerned that another 5-10% downside is possible from the current levels as flows are unlikely to improve anytime soon. In an interview to CNBC-TV18, Devesh Kumar, Head of Equities, RBS India said, "If one has a long-term view then it's a good period to accumulate. At the same time, if one hates to see his purchases going down in value then one has to wait. We feel that there could be a 5-10% downside which may prolong for a month or two and post that in new year we may see positive bias in the market." However, Kumar is positive on banks. According to him, all negatives already priced into banks and hence it is a good time to acquire banks over next 20-45 days. Also read: Ludicrous to invest in US, Europe over India, says Jerome Booth Below is the edited transcript of his interview with CNBC-TV18's Sonia Shenoy and Mitali Mukherjee. Also watch the accompanying videos. Q: It's been a difficult start to October for the market. What is your sense of where we maybe headed? What kind of floor this market may have in place? A: In terms of institutional flows, September was one of the bad months. We are foreseeing that October may not be very different. I think people are preferring to be fence sitters. Fear of a bear market is keeping people away from the market. As far as India is concerned, people feel that emerging markets and country like India are good place to invest in. But at the same time, there is no hurry for people to come in into these markets. Valuation wise or if you look at bottom-up analysis then many of the stocks are looking very attractive, very cheap. But in this type of phase of market, top-down many times overshadows bottom-up analysis. Therefore, at this point of time, talking about valuation, whether you look at PE multiple or whether to get price to book value, will lead to a feeling that stocks are very cheap. If one has a long-term view then it's a good period to accumulate. But at the same time, if one hates to see one's purchases going down in value then one has to wait. We feel that there could be a 5-10% downside. But otherwise this phase of accumulation may prolong for a month or two. Post that, in the new year, we may see a positive bias in the market. Q: On flows, what are you picking up? That has been quite difficult for the market, infact September-October patch has been the worst we have seen this year interms of pure outflows on the cash market. A: We don