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Tuesday was one of the worst days for Indian markets in recent memory but it hasn’t fazed market mavens. Ramesh Damani, member, BSE, explains why. Edited excerpts:
What is the sense you are getting on the ground?
There is foreign investor selling but no underlying panic. The markets fell but there was no panic.
What do you make of the worries over crude oil?
Oil going down should help India. It is unclear why this should be seen as a negative for India.
There is a sense that it might signal a slowdown in major emerging markets, especially China.
Oil is not going down because of a slowdown but because its fundamentals have changed in terms of supply and demand.
But, would you expect the risk aversion seen in commodities to spread to Indian equities?
I think it’s a good buying opportunity. I would probably step up to the plate tomorrow and buy something. I view this as a strong correction and nothing beyond that.
The markets were very bad today, so we’ll just have to watch for it to make a bottom and then bounce from that bottom and see how it bounces. I’m surprised that we are down 900 points. I’m trying to find an explanation… there is no reason that we should be down 900 points.
Is there a case to be made for further downside?
There is nothing to suggest the bull market is over. The market is not over-leveraged, nor are IPOs (Initial Public Offers) very heavy. None of the classic signs of a market on a top are present. Bull markets do show changes in direction but, typically, the markets recover. Once you get further into January, people will be looking at the budget, at global flows. I think the market will recover. At least, that’s the thesis I'm working on.
The only gainer today was consumption-driven stocks. Is this part of a larger play towards defensives, that might come up in the days ahead?
I think any theme of a return to the defensives might be overstated. My personal feeling is that the market will reward aggressive stands. Today is a one-off thing. You want to bet on people who are looking to grow their businesses. So, I don’t think defensives will work.
