With markets turning immensely voltile, P Phani Sekhar, fund manager, portfolio management services, Angel Broking, tells Puneet Wadhwa that global conditions will continue to dominate the domestic markets. Edited excerpts:
The markets have been volatile of late and have been trading mostly with a negative bias. Do you expect more downside, or is the worst behind us?
The Indian markets have been reeling under the twin impact of the crisis in Europe and fears of an impending slowdown in China. A steep correction in the Chinese markets has increased the fear psychosis among investors.
The sovereign crisis in Greece, followed by concerns about similar outcomes in other countries in Europe, has brought back fears of a confidence crisis witnessed in the wake of the Lehman collapse. It has lead to global investors flocking to the US dollar, adversely impacting many commodities and currencies.
The chances of a further downside in our markets depend completely on the global markets, which seem to have stabilised now. However, investors should focus more on the fundamentals of an economy and specific stocks, rather than predicating the probability outcomes of a fall in global indices or other events.
What is your investment strategy at the current levels? What are you advising your clients?
We believe that chances of a repeat of the credit crisis are low. Even if it happens, it would be overcome quickly, as the world has a better experience of dealing with it now as compared to 2008.
Considering all these factors, we have been investing wherever value has emerged due to correction, as trying to time markets is fraught with risk for long-term investors.
Do you expect the mid-caps to outperform the broader indices in 2010?
As the correction has not been uniform across the market, it is difficult to forecast if mid-caps will do better than large caps or not.