The Indian equity market is currently being led only by foreign inflows (FII inflows) and it may see a level of 8000 buoyed by this positive, says Sandeep Shenoy of Anand Rathi.
Speaking to CNBC-TV18, Shenoy says while the flows have been unabated, there is flux in the US markets now.
Also read: CCI imposes Rs 2544.64 cr penalty on 14 auto companies“The stage is set for capital market, but the day the tap runs dry the market will correct. The Nifty is definitely way ahead of its fundamentals,” adds Shenoy.
He further adds that IT and healthcare are the sectors providing some sense of solace.Below is the edited transcript of Sandeep Shenoy’s interview to CNBC-TV18’s Latha Venkatesh and Sonia Shenoy
Latha: Will the market wait and watch and not pull the plug, wait for September 1 or do you think that we are going to see the rally stymied for now?
A: I think it is going to be long drawn. I don't think we are going to get any solution on the September 1 hearing. This has been simmering for quite some time and now it has exploded and it is impacting people on the ground.
If not handled properly and if the frame work is not laid, it can probably shave off 1 percent of our expected growth next year. Let’s be mindful of the fact that if there is a question mark on 28000 megawatt, that is a substantial part of our generation capacity and if that becomes costlier, it is going to affect the EBITDA margin of lot of manufacturing sector. So, somewhere I think we are now skating on thin ice and somewhere may be activist could be the new form of you can say hanging sword on most of the India Inc. Latha: Do you think we are not going to see even 8000 very easily or do you think the market will for the next 48 hours go over F&O logic and do its own thing and the real selling will perhaps start next week.
A: There are two aspects: the first one is the flow of money towards Indian market that has been unabated and I think we have seen the effect of that. But now slowly and steadily, we are seeing some flux in US market and I am one would’ve seen flux in our own market yesterday also.
The stage is set for a correction to come in our market, the day the capital inflows stops which probably could be few weeks from now we could see. In this momentum we may see 8000 or even may be 8100 level getting felt but again that is more of an outlier level rather than a fundamentally justifiable level. Momentum always takes markets to its own level but fundamentals ultimately prevail. I think we are way ahead of fundamentals at the current juncture.
Latha: So what is the strategic advise to an HNI who might ask you, is it don't buy or is it actively sell in any counter?
A: If the momentum is in your favour, don't try to commit too much of money, but don't try to get off in hurry also. Never argue with momentum because it takes markets to unprecedented highs and that is what is underway right now. But yes, post the rollovers, keep yourself ready for taking some money off the table because you will definitely get a chance to re-enter at lower levels from here to December.
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