The current rally in the market due to short covering before expiry has sparked off hopes for a pullback. Speaking to CNBC-TV18, David Pezarkar, the head of equity at Daiwa Mutual Fund says that the market may experience some short term respite. "A significant percentage of the negatives are already priced in, so there could be a few more days of a positive bounce," he said.
However, global and domestic factors haven't completely cleared up, so he expects the market to hurt for another three-six months. In the current scenario, Perzarkar bets on banks and metals, but advices investors to stay away from the capital goods space. Below is an edited transcript of his interview with Sonia Shenoy and Latha Venkatesh. Also watch the accompanying video. Q: First a word on the big sell off that we have seen in the market in the last one week.Are you expecting to see some respite or are we still going to move southwards? A: I think in the immediate short term we will see some respite largely because the extent of the fall has been quite dramatic and the causes of the fall were both global and domestic. Globally, we all know what sort of uncertainties are there in the euro zone. On the domestic front, I think the quarterly numbers were generally worse than what people were expecting, largely because of the adverse movements of the rupee. So you could say a small proportion of the people who were the remaining bulls in the market also sort of capitulated and once the market gains a particular directional momentum, then it feeds on itself. So that is what we saw in terms of sharp fall. From a technical perspective, it should bounce back a little bit. If we hopefully get some positive news from the international front, then we could see a few more days of positive moves. Q: What is your own strategy at Daiwa? Did youDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
