In an interview with CNBC-TV18, Dipan Mehta, Member, BSE and NSE, spoke about his reading of the market and his outlook.
Q: The IIP number in itself is not so bad but still markets have chosen to fall quite a bit down what is your view?
A: What we are seeing is speculative driven sell off taking place at this point of time. The Index of Industrial Production (IIP) numbers have been quite volatile and perhaps this is just a minor blip. My sense is that if Europe opens steady and the Dow and Nasdaq futures also trading in the positive towards the end of session you would see at least some sort of a recovery.
Remember, a lot of money on the sidelines to be invested and that is quite discerning in the sense that they want to get into secondary market and not so much into overvalued primary market. So that one needs to keep in mind and corrections are shallow and are being bought into. So I am not too perturbed about this last few minute sell off, which has taken place.
Q: This attempt at 5,182 has been what now two-three times and the markets have not been able to cross that level. This time of course its also backed by if you can call it a fundamental factor that IIP numbers were not the big surprise that the markets were expecting them to be. So do you think that now the climb gets even higher or gets even tougher?
A: I think a big demon has been made out of this 5,180 level. Its just an intermediate top and with the kind of severity with which corrections have been bought into its only matter of time before the market start trading at higher levels. There is nothing to get so perturbed about that 5,180 again was not breached.
If not today, in the next few trading sessions it will get done. The question is that the underlying trend remains quite strong and technical are in favour of the market as is the liquidity position. So just based on that analysis there is a strong probability that we may see more than 5,200 in this month itself.
Q: So at the moment you are not a seller but would you be a buyer even at 5,100 levels?
A: I think that correction selectively one should we are buyers and we should look at increasing the exposure. But always one use to be on the lookout for any bad news that thing is still quite fluid in the global markets and thats one thing which kind of worries us not so much about the domestic related issues as much as the fund related issues because foreign institutional investors (FII) are driving the market and they are playing the global markets and trading in India.