Benchmark indices staged a rebound on August 26 to post its biggest single-day gain in the past three months but ace investor Shankar Sharma feels that the rally may not last long as the economy is yet to come out of the woods.
In an interview with CNBC-Tv18, he said that market sell-off forced the government to announce the stimulus package on August 23.
But the real reason for the fall was not FPI issue, but very poor economic news, said Sharma. He further added that there is no crisis in the world, but, at best, we could say that there is moderate recession.
"We are not in the middle of a global slowdown as this is not same as 2008 or 1997-1998. This is 'Made in India' crisis," explained Sharma.
He said the measures announced by Finance Minister Nirmala Sitharaman are unlikely to address economic issues.
"At best, we could see the momentum going for about a month because of the measures. I don't think that will translate into a real economic turn,” added Sharma.
Commenting on what should investors do, Sharma said that largecaps are likely to hog limelight, and small & midcaps might not do much. This is not the rally to buy, but to sit tight, he added.
Equity market mimics economic fundamentals. A bull market may or may not be based on fundamentals, but a bear market is always based on fundamentals, he said.
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