Mkts haven't bottomed out, don't buy: Kotak Sec

Q: We got a bounce today but are you still pretty circumspect because we have just bounced back from October lows? Do you still think cash would be king or would you venture out and buy currently?

A: The situation of being circumspect still continues. We have been going down for the last six–seven trading sessions. So we don’t know whether it’s just a rebound or if a bottoming out [has happened already]. Looking at developments both domestically and globally, we don’t think that we have bottomed out as of now.

Q: Would you think that 2,252 bottom is something that will hold? Do you think the economic situation warrants that markets should go even lower?

A: It is difficult to say but there are two things. One is the fundamental performance and second is the valuation. Beyond both these is also the fact that is there any money inflow coming in into the market. If not, we cannot say whether the market will start rebounding sharply.

Q: How will you interpret this evince in terms of your own actions? Will you be buying when the index moves closer to 2,252 or will you still hold back?

A: We are holding back as of now. Obviously, we will have to keep reviewing at every point of time and that could at any level. We will obviously keep reviewing but the more cautious thing as of now would be better to wait for some time before trying to venture out.

Q: Even if you’re not recommending any investment buys, would you say that traders have a chance to buy now and the market has shown a tendency to jump back from these lows?

A: I do have expertise on trading but if we look at it from the perspective that — leaving aside or including today — in index terms maybe we are not back at the levels touched in the last week of October. But a lot of stocks are below the prices at which they were on that day. It is a very difficult thing for traders. Also let’s take into account the speed of the market at that time. [Then] there was a sharp fall and there was a sharp recovery. Now the sharp recovery has gradually come down and how much gradually it will go up — if it goes up — is a difficult call.

Q: The rupee is at an all-time low and is getting weaker. Is there anything that you like from IT or textiles currently?

A: The performance on the fundamental side of the industry is still not something that will make one buy only for the sake of currency movement.

Q: Will you buy private-sector banks?

A: Selectively, maybe not at this level but at some point of time: yes.

Q: So you think that they have not fallen enough?

A: Possibly not.