Indian mkt not yet at point of huge liquidation: Nick Parsons

Indian market is not yet at the point where huge liquidation is being seen but it more a defensive positioning, says Nick Parsons, Head of Research - UK & Europe at National Australia Bank sharing his views to CNBC-TV18 on market weakness ahead of US Fed meet this month end.Parsons feels globally, despite no real good news markets have somewhat reluctantly been dragged higher on hope of continued asset purchase by the central banks. So, now as it seems the monetary taps are being turned off it has undermined sentiment.

There is no reason to believe that buying the dips will be a losing strategy this time, he says. However, what level is bought is important as the retracement might take a while longer than expected, he adds.Below is the verbatim transcript of Nick Parsons’s interview to Anuj Singhal and Sonia Shenoy on CNBC-TV18.Anuj: Your sense of what is happening right now? The market is a bit worried. Is this the market's view of arm twisting Fed like it has done in the past or are the rate hike fears genuine now?A: It is not just the Fed. We have seen similar messages now from Mr Draghi, the European Central Bank (ECB), from Glenn Stevens, the Reserve Bank of Australia and indeed from your own central bank in India. We have seen concerted chatter, let us put it no more strongly than that but we have seen concerted talk that perhaps we are reaching the limits of monetary policy and that perhaps now it is time for policy makers to think about fiscal policy and infrastructure and government spending and that really we are being weaned of the idea that there will be further expansion as central bank asset purchases and central bank balance sheets.That being the case you rightly said just there that there is no real bad news around but equally markets through the summer months have had no good news either. What has happened is that that promise, that prospect, that hope for continued asset purchases has kind of dragged the markets some more reluctantly up to the levels that they were. So, soon as it seems that those monetary taps are being turned off it is that that it undermines the sentiment in equity markets worldwide. So, it is not that there is just bad news because I would agree with that but there is no good news and markets at their valuations in the middle of last week needed ever more good news to just hold in there.Sonia: If this liquidity tap does reduces or goes a little bit dry towards the end of the year how should a long term investor approach it because so far up until now every dip courtesy global markets has been a great buying opportunity for Indian investor. Does that still hold?A: It is truism but you would have to say it holds until it doesn't and there is no reason to believe that the buying the dip will be a losing strategy this time around. The issue is at what level does that dip buying come in and it may just be that the retracement I have to be a little bit further down than we have seen in recent ones. Meaning, I have to say if you were looking at the end of August the Sensex just below 28,000 bit of context here we are getting towards the half way point of the month, it is still 28,300 and it is really not as good as it was. It doesn\\'t mean that the performance in any way has been bad and we could still see the scope to some outperformance we are not yet at the point where we are seeing huge liquidation. It is just a slightly more defensive positioning. It is no more than that at the moment.