The Dalal Street on Wednesday saw a second day of steep falls with the Nifty plunging 101.35 points to 8135.10, dragged by FMCG, pharma, auto and select banks stocks.Dilip Bhat of Prabhudas Lilladher says FIIs continued to invest into mutual funds (MFs) while they were selling off in spot and F&O market. The fear that the inflows into MFs could stop soon is playing out on the market, he says.While Bhat believes it is still a sell on rise market, he advises investors to not rush into buying stocks as the market continues to be expensive.Below is the transcript of Dilip Bhat’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.
Sonia: What took place in the markets yesterday was it a lot of foreign institutional investors (FIIs) liquidating their portfolio holdings or was it just a retail panic where we saw a lot of long unwinding and selling from the retail community?
A: I think the day before yesterday after the Reserve Bank of India (RBI) announcement, the sentiments got weak. Yesterday we had all kind of rumours, right or wrong who knows but they all compounded the matter in a very bad way; the news that some real estate fund is winding up its operations.
The continued FII selling which is rocking the market, some change in the accounting system, in such a situation obviously somebody was trying to take advantage of this bearish moment and was compounding the whole matter.
So, all those factors played out and the fact that everybody knows that the Q1 numbers are going to be weak, Even if you were to read the statement of Rajan, it clearly looks like that overall things are not in such a good shape as the GDP suggest, that is what he is saying. So, that is what will make the markets still very tentative and apprehensive at least for sometime to come.
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