Money may shift from BFSI, auto to IT, pharma sector: Edelweiss

There could be some downside for the market going ahead, cautions Yogesh Radke of Edelweiss Securities.

The banking, financial services and insurance (BFSI), auto segments may be vulnerable to a feeling of euphoria currently seen in the stock market, he said.    

Given the underperformance in IT and pharma space, the two can be the 'hiding places' and may outperform the broader market, he told CNBC-TV18. "Money can get shifted from BFSI and auto sector to IT and pharma," Radke added.Below is the verbatim transcript of Yogesh Radke’s interview to Anuj Singhal, Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Anuj: The interesting bit was India VIX. On Friday we saw a bit of a surge and today also we are seeing a bit of an uptick. Do you get a sense that the market has some more downside left in the current series?A: You pointed out rightly that the VIX now started shooting up and obviously the risk on mode has now shifted to risk off mode with all the global markets also coming under pressure. At least on the Nifty today we saw a good amount of support coming at at least 8700 levels and market slightly moving up. But we will have to see how that pans out during the day.We may actually head into the lower channel which is 8,500 and 8,700 after this fall. So, there could be some more downside for the market but volatility surely is going to inch up higher from these levels. So, if anyone wants to bet on that direction it would be better advisable to go via the options rather than the directional long shot bets in the market at least on the Nifty side.Latha: Stock wise which are the most vulnerable pockets in the Nifty?A: It is all the function of what has been the most flavoured one in the entire rally. Obviously the Banking, Financial services and Insurance (BFSI) segment is the one which could be under risk at this junction. You may find also the auto stocks having some amount of pressure into the upcoming days. Hiding places could be around the IT and pharma with they being underperformer for long time now. So, that could be the hiding place, I am not saying there would be an absolute outperformance in the sector but surely BFSI, auto would be on the riskier zone and maybe hiding places like pharma and IT could be seen there.Sonia: By hiding places what do you mean? These stocks have been under quite a bit of pressure, so what would be the strategy there in IT stocks?A: IT stocks if you see Tata Consultancy Services\\' (TCS) and HCL Tech, Wipro these have been correcting a lot since last couple of weeks you can say now. So, you may find the money getting shifted from the BFSI segment or the auto sector to the IT sector as a whole. You may find at least these stocks stabilising obviously have US election and other pain points for the IT sector but the stocks may outperform to the broader market, that is what is the call.Anuj: Just a couple of stocks, what have you noticed there. One is YES Bank and the other is Vedanta. What is the data telling you here?A: YES Bank obviously is going through their own patches. So, I would avoid the stock at least for the time frame till things don\\'t get settled down there. At least for Vedanta it is driven by the Cairn-Vedanta deal. Surely the Cairn shareholders meeting is going to happen today and given that Vedanta shareholders voted in favour with Life Insurance Corporation of India (LIC) also voting inside that what is largely understood looks like the deal is going to go through and obviously the benefits would surely come to Vedanta as a whole. That is the spread around six percent odd but the deal completion also would take around six to seven months as a whole.Latha: Any pockets in the midcap space where you see more longs having to unwind?A: Multiple stocks are there, stock specifically will not talk on those bunch but surely the stock future OI is more than Rs 1 lakh crore plus and that size wise that is quite heavy OI. So, we are having leveraged positions. Any type of negative sell flows in the market would create a cascading effect, that is there. But we will have to see how things pan out as we are looking also at that in this week there are multiple markets which are closed at different days.So, the participation wise also from the institutional segment it is like muted participation or less participation which is there. So, if buying interest also comes that would not be on a full-fledged ones. So, this week is surely a very volatile one and some amount of sharp up and down moves could be seen in the index and stocks also.Latha: Is there any specific Nifty or Bank Nifty level if touched would worry you?A: Surely whether if you see the Nifty was trading on a channel of 8,500-8,700 for more than two months duration and after that we saw a breakout. Now, a part is that we go below the 8,700 level then it goes into the lower channel which is 8,500 and 8,700 but if we break the 8,500 that will surely give a big worrisome sign for the market because that was quite a supporting zone for more than two months duration. So, that is a worrisome sign.On the Bank Nifty part 19,500 level is also a crucial level and obviously later on it falls down to 18,500 levels, so, that is 19,500 to 18500 is again the Bank Nifty\\'s level which are there.