Rebalancing in ETFs and pension fund buying support helped the markets rally. The RBI announced an out-of-turn rate cut and measures to improve liquidity in the system.
Sustainability in the market will depend on the behaviour of the COVID-19 curve and the new cases in the coming week, Naveen Kulkarni, Chief Investment Officer, Axis Securities Limited, said in an interview with Moneycontrol’s Kshitij Anand.
edited excerpts:Q) It was a volatile week for Indian markets, but the good part is we managed to bounce back from 7,511 thanks to the various fiscal measures taken by the government and authorities around the world. What is your take on the market action?
A) The market has bounced back from the lows of 7,511 as stimulus packages were announced in the US and other developed markets.
Also rebalancing in ETFs and pension fund buying support helped the markets rally. The RBI announced an out-of-turn rate cut and measures to improve liquidity in the system.
All these factors helped the market bounce back. With these announcements through the market, sustainability will depend on the behavior of the COVID-19 curve and the new cases.
If the new cases get contained and the curve flattens then the markets will sustain otherwise the markets will correct.Q) After registering a series on series fall of more than 25 percent in March, what is the sense you are getting for the April series. Do you think we could hopefully close in the positive – what does the data suggest and any stocks which investors should watch/avoid? Have we made a bottom around 7511?
A) April will be a very tricky month. A lot will depend on the lockdown period. If the lockdown period gets over by mid-April then it is very likely the markets will close the April series in positive.
If the lockdown period gets extended to end April or beyond then the markets are very likely to correct. Also, if the lockdown period gets extended then it is very likely that the bottom of 7,511 would be breached.
Q) What are your thoughts on the package announced by the government and RBI? Do you think these are enough to cushion the economic impact of COVID-19 on investors and citizens?
A) The government package of Rs 1.7 lakh crores is not very significant for the markets as it is primarily intended for the needy. The RBI will help the markets as they were expected and announcements have come at the right time.Bond markets were seeing significant volatility. This will reduce with the injunction of liquidity measures. Overall the measures will provide some cushion to the market and help people to conduct their routines.
Q) How is the month of April likely to pan out for investors? Do you think we can cross 10,000 on the Nifty?
A) It is quite tricky to judge whether Nifty will cross the 10,000 mark. At present, it seems difficult as COVID-19 cases have continued to rise.
The number of cases in India will cross 1,000 this week and the next week will be very crucial. The level of community transmission and mortality rate will be quite critical parameters.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.