Jagdish Malkani, Member of NSE said that 8000 is a ‘strong’ support level, despite concerns about below average rains.
"It is not that we are better prepared agriculturally, the MET department with all due respect often go wrong, there are other credible MET watchers who have not taken such gloomy views,” Malkani told CNBC-TV18.
In Bank Nifty, Malkani is bullish on private banks against PSU banks which have more non-performing assets (NPA), he told CNBC-TV18.
Commodity stocks have been weak because a lot of commodity dependent countries have gone down on the back of Chinese economy slowing down, he said.
Below is the edited transcript of Jagdish Malkani’s interview with CNBC-TV18's Reema Tendulkar and Mangalam Maloo.
Reema: Is there anything that you would attribute this last one hour sell off that we have seen and we were looking at 8000 as a support, do you think that would hold?
A: The first question, no, it is just a continuation of the bearish mood of the market. Yes, I am sort of sticking out, don’t quit, I still think 8000 or thereabouts will be reasonable support level to expect but at the moment this is the third day in a row the same - especially the afternoon session when some overseas markets opened, Europe etc. But I have to say that other than FII actions clearly there is a lot of local selling happening and it depends on what theme seems the right one to go with. Yesterday with all poor balance sheet companies was overdone and now partly another theme that seems to be starting is after the sad Nestle episode then maybe some of this real strong brand name companies suddenly some folks are starting to say oh, is this worth paying this kind of huge PE ratios etc.
Mangalam: So where in the market or in the current bearish trend do you see some sort of support or buying coming in then?
A: As I said I do think 8000 or thereabout should be a strong support level. Heavens have not opened up after Mr Rajan’s 25 bps. The market had overdone the expectation and then of course the monsoon front it is a yes, but it is not that we are better prepared agriculturally, the MET department with all due respect often go wrong, there are other credible MET watchers who have not taken such gloomy views. So I really think this fall has been overdone but who is to argue with Mr Market.
Reema: So perhaps 8000 will hold but what about Bank Nifty because in the last three days the Bank Nifty has underperformed. We have seen the Bank Nifty lose close to about 1000 points and that is a cut of close to about six odd percent. Where would support lie for the Bank Nifty?
A: Again the private banks continue to be attractive according to me especially at these levels and then the PSU banks back separately. Although I am not a champion on this but they have been really beaten down mercilessly and are reflecting all the NPAs etc. But if you had to ask me what I would be I would still go for a couple of quality private banks.
Reema: Any particular reason why commodity linked stocks are so weak. In fact that is the sector which is the weakest today?
A: No, there is a continuation. As China slows down China is a big behemoth and you can see even the Australian economy has gone down. Many of the commodity dependent countries are suffering due to the China slowdown which is a part of a conscious policy. So, clearly in metals other than zinc I can’t think of a single commodity which is looking fundamentally. I don’t know about the stocks.
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