Some of the global funds are selling off some of the largecap positions which they had kept, says Deven Choksey of KR Choksey Investment Managers. This is what is bringing down the market, he says.
He sees a little bit more fall from current levels. "Who knows 7,600 could also be tested on the Nifty and should it not hold around that level then I think in worst situation 7,400," he told CNBC-TV18.
Below is the verbatim transcript of Deven Choksey's interview with Sumaira Abidi & Nigel D'Souza on CNBC-TV18.
Nigel: What are you making of this sudden mid-day sell-off? The European markets opened lower and then we are just following suite, where exactly do you expect us to stabilise?
A: We have seen this particular possibility that the market, if it breaks into some of the technical levels, certainly the fall would aggravate and the fall would be sharper; that is what has exactly happened. 7800 has been a pain point and that is why the market came to test it. Largely if you see, these areas where the money is getting out of the system is some of the global funds that are basically selling off some of the largecap positions which they have kept. It includes the banking space, it also includes the IT space which has largely brought down the market.
If you look on the other side, the midcap companies, they are not so badly affected because they are not holding that kind of position, neither the domestic are selling into the midcap. So, largely you see the selling pressure, redemption pressure as you may want to call it which is coming from the global side which is pulling out some of the funds from the larger cap companies.
Sumaira: Then the advice for retail investors is for the moment is to stay on sidelines to just stay put?
A: According to me the fall would probably be there and we may have to see little bit more fall from current levels. Who knows 7,600 could also be tested on the Nifty and should it not hold around that level then I think in worst situation 7,400. As of now we don’t count that possibility. We will probably wait for this to happen if it tests below 7,600. Certainly in this particular fall, retail investors including some of these institutional investors would be buying into some good quality stocks. Valuation-wise things are not bad. Fundamentals haven’t change for those companies so certainly buying opportunities at lower levels for sure.
Nigel: What would you look at? In the past you have been quite positive on something like a State Bank of India (SBI), you have been positive on Reliance Industries, Tata Motors as well all of them have seen a big corrections. Do you think full retail investor, it is time to start chipping in currently?
A: These stocks are offering valuation advantage and probably investors would buy them. So fundamentals would support them because you have mentioned names of Reliance, SBI and Tata Motors they are available at a valuation which is far more discounted to even the market valuation. The business conditions are better for them in any case. So, certainly it would consider them into the portfolio in this fall.
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