Markets may see a short-term knock of 4-5%: Kotak IE

Brexit voters might just have overshadowed the Bremain voters and the tremors are already being felt in the global markets, including that of India's.   It is difficult to forecast the markets in short-term, but one will see a knock of 3-5 percent in both the major India indices, said Sanjeev Prasad, Senior Executive Director and Co-Head Strategy, Kotak Institutional Equities."Nobody was prepared for it. Market was pricing in for remain. This is a real shock," he added. However, he maintained that positive news like clearance of GST Bill in the coming session of the Parliament, good monsoon season and decent Q1 FY17 result, may bring back the zing.  He is positive on some names like Tata Motors and IT stocks in the long run, and expects the markets to find bottom in a few months' time. He further said, that there is nothing that any central banks can do now. India a very closed economy, sentiment may hurt the market but not an exporting country.  Below is the verbatim transcript of Sanjeev Prasad’s interview with Latha Venkatesh & Anuj Singhal on CNBC-TV18. Latha: How bad can this get, do we get to 7,950; do we get to even lower levels 7,850? Is there a buy level at any level today? A: It is difficult to forecast in the short-term but I would assume you would see a knock of somewhere about 3 to 4 percent if you look at the current numbers are looking like the market is 3 percent down already. May be another 1-2 percent down and we should be finding some level of stability I hope. However, having said that this is something which nobody was prepared for to be honest with you. The markets are pricing in remain and this is a real shock as far as the market is concerned. Let us see what all announcements we see going forward today. I don’t think the government can do too much in terms of making any great announcements. However, as we go along with the next few weeks, if you see some positive news coming out of India in terms of may be the goods and service tax (GST) bill getting passed in the parliament in three weeks time when the parliament reopens, good monsoon news and hopefully a decent result season may be that should start improving the sentiment as far as India is concerned. Latha: You have seen many such days September 11th 2001 and then ultimately that market bottomed only September 21st 2001. I so well remember it was 10 days before the market found a bottom. Likewise you saw the Lehman Brothers and that took perhaps 6 months to find a bottom. We found a bottom in March of 2009 taper you again saw that rapid decline of stocks and currency across the world and I can’t remain how many days that lasted probably a month before we found a bottom probably on the last day of August or the second last day of August. Should one buy now or just step out and wait for this to settle? How many days you think? A: It is always difficult to find a bottom up for market but having said that some of the stocks which are come off today like Tata Motors, Maruti Suzuki some of the IT names these are very good companies they will eventually be, let us 6 months or 1 year down the line probably be significant higher from where we are. So, if you have the courage to hold on for few days and not worry about another 2-3 percent correction which may happen in the stocks you are taking a slightly long-term view. It is probably a time to re-visit some of these names. Ultimately, that is where you make real good money when you buy some of the good quality names in panic and our advise would be if you are long-term investors which she should be you can start picking up some of these names like Tata Motors, IT names etc.