Greek fears leave market undeterred, but for how long?

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|Indian market displayed some measure of resilience—the Nifty recovered from a weak start to close flat at 5,258. The Sensex ended marginally in the red. This despite fears that the carefully crafted EU debt would fall apart continued to cast a shadow on global markets.

Today’s resilience is good news for the bulls, says Sudarshan Sukhani of technicaltrends.com. "After having seen almost 400-point rally it was only natural and fair that we will see the market going through a correction," he said adding, "We saw a 150-points fall, which sounds fair and now it seems to be suggesting that the dip is over. If that is so then this is a very good time to buy on dips—buying in the Nifty, in blue-chip stocks and look forward for another rally. You need a stop loss that is 5,200 for the time being. But beyond that, you let the market do its own thing. I think we are in an upmove and we should see better levels."


|In an exclusive conversation on CNBC-TV18, Amit Dalal of Tata Investment Corporation also spoke about how he reads the market going forward. Below is the edited transcript of the interview.

Q: Do you think this is another round of turbulence for global markets?

A: The Greek Prime Minister’s announcements of a referendum vote shocked everyone. I hope that they find some solution by Friday. Normally situations like these, before they turn for worse, get corrected by some wisdom prevailing somewhere. But if that were not to happen then Monday onwards we have to deal with a new type of volatility in the global markets.

Q: We understand that that referendum is possibly going to come through by December. Till then how would you possibly approach the markets and would it just be volatility, which will be the name of the game for global equities as well as for us?

A: I would say if the referendum is voted for on Friday mid-night, then you are going to have tremendous volatility till December. But I am quite hopeful that that may not happen because events that are catastrophic in nature do not take place so easily and things would correct themselves. But if they go for a referendum, I think you have tremendous risk to equity markets worldwide.

Q: What have you made of all of the public sector banks’ numbers? Today also we got a surprise in the form of Allahabad Bank. From the entire lot, which one is your favourite now after seeing the performance?

A: The biggest concern that any bank brings on the investors’ table is the change in its gross non-performing asset (NPA) and which sector has really brought about that change. Allahabad Bank came out looking much favourable because there was no year-on-year change. Though I believe there was a quarter-on-quarter change in the value of the gross NPA.

As far as the public sector banks on the whole are concerned, Bank of Baroda is a bank which has little more cautious, discriminatory ability with its loan portfolio and therefore I would feel more comfortable over there.

I am still a propagator of private sector banks rather than public sector banks.

Q: What have you made from the entire auto sales for October?

A: Definitely two-wheelers have become the stars and the rural demand or the tier-III demand of cities has captured portfolio interest of all buyers. Where Bajaj Auto and Hero MotoCorp are concerned, I feel Bajaj Auto has a very good export story built into its books and therefore it is definitely a more preferred stock.

It performed exceedingly well in the last one-and-a-half-year. It’s up 120% from where it was in December 2009. And the upmove is going to continue because the rural demand and the demand coming from government fiscal expenditure is taking place in favour of the farmers or in favour of the National Rural Employment Guarantee Act (NREGA) beneficiaries will continue to see that there will be increased demand for two-wheelers rather than four-wheelers and four-wheelers are suffering. That is quite clear because of the high interest rates and the high petrol prices and that’s not going to go for until a while—for another 6 months at least.