Prices not in irrational zone yet, but new buyers beware:Pioneer

Sandeep Shenoy of Pioneer Investcorp says that private sector banks cannot remain immune to the pain in the broader economy, though they will be impacted to a lesser impact as compared to public sector banks.In a discussion on CNBC-TV18, Shenoy says the bad loan clean up process is only halfway through and that there could be negative surprises for another couple of quarters at least. Judging from the quarterly earnings announcements so far, he feels earnings growth for the current financial year is unlikely to be around 18 percent estimated by a majority of analysts. He expects the number to be toned down in the coming days. The only positive is that the market is a bit more realistic about the problems facing the economy, and also that policy measures are underway to redress many of the challenges.Shenoy says liquidity will be the key driver of stock prices in the near term as foreign investors are pouring money into the Indian market. Shenoy's advice to those who are already invested is that prices are not yet in the irrational zone and could climb for some more time. However, he says that those looking to buy afresh should wait for a while as the risk reward ratio is not really favourable.They will get a good opportunity to enter the market over the next couple of months, he says.Watch video for full interview