Deepak Jasani of HDFC Securities believes volatile moves in the market will continue till the liquidity situation improves and till people have more confidence in participating in the markets.
In the current market scenario, Jasani suggests, "Act more like traders; buy after a couple of days of panic and exit when things bounce back." Sector-wise, Jasani finds capital goods the sector that gives him a comfort level in panic situations.
Excerpts from CNBC TV18's exclusive interview with Deepak Jasani:
What did you make of the kind of slam back that we have witnessed in the opening hours of trade, the kind of weakness that continued for the better part of the day and the signs of recovery that the market showed towards the end?
Basically, the market participants are jittery. The liquidity in the markets is deteriorating day by day. In fact, the cost has risen. The emerging markets or global markets were down yesterday. We opened down and people started going short.
Once the European markets stabilised after opening, we saw a big amount of short covering happening in our market. These kind of choppy and volatile moves could continue till the liquidity situation improves and till people have more confidence in participating in the markets.
What do you think would bring about that recovery in the liquidity situation as well as in the markets?
It is a difficult call at this point in time. No one circumstance or no one measure could bring it back at this point. Just as a lot of factors contributed to the upmove and to the downmove, a combination of factors could result in stability and return of the confidence.
What are you advising you clients at this point?
Typically, we are advising our clients to act more like traders; buy after a couple of days of panic and exit when things bounce back. So do not keep positions for a longer period of time, till there is stability on the overall front.
What are the kind of recommendations you are making at this point?
Basically, we are a bit bearish on banks, oil and gas. In metals, there could be a lot of volatility, so there could be a lot of opportunities for traders. I think capital goods is one sector, though the valuations are not very cheap there even at these levels. But that sector gives some sort of a comfort level in panic situations.Sensex Rise and Fall: Complete Coverage
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