Dipan Mehta, Member of the BSE and NSE, sees volatility in a narrow range and thinks that participation is gradually waning. He feels the market is trying to get into some kind of a trading range. However, he added that all bets will be off if there are global developments which takes global markets sharply lower or higher. Taking the last low closing and the last high end into consideration, Mehta feels that the broad trading range is anywhere between 8,500 for the bottom and about 10,500–11,000 for the Sensex at the top. He added that while we are in this volatile scenario one has to live with higher trading bands and that the market could easily turn 2% or 3% up or down on any particular trading day. “So till we don’t see a sharp correction in the volatility it is very difficult to give a call on the market and where exactly it will trade in the immediate short term,” Mehta said. Mehta is relatively overweight with respect to rate sensitives. He said that gradually we are seeing improvement in the environment for banks and as and when recovery does takes place this sector will lead the recovery. However, he said, there are certain other challenges for the industry in terms of Non Performing Asset (NPAs) and may be gradual slowing down in credit growth rates. Mehta, with regard to the technology space, feels that investors are expecting the worst in this sector because it is the one sector which will get directly impacted by the global recession. He said if the US, being the largest market, sees negative Gross Domestic Product (GDP) growth rates and corporate profits, there will be sharp cuts in the IT spending and that would directly impact the companies. Mehta said that defensive sectors, such as Indian pharmaceuticals, show a high conviction to buy given that they benefit from a depreciating rupee. He said volumes have remained stable for this segment and profit margins are moving on account of better gains on the foreign exchange currency side. He feels that FMCG is another sector which seems to be pretty stable at this point of time. “We have seen decent results coming out for the September quarter for most of the FMCG companies,” he said. Nitin Raheja, CIO at Rada Advisors, feels this quarter will probably be the worst quarter for corporate India. He also believes that the market will at some point in time test the lows of October. He added, “In the short-term what we are looking for is that on the macro front while inflation and commodity prices look good, the rest of the news as far as industries are concerned is not very good. So, if the markets were to break these levels, I would expect us to probably see a little bit more downside from here.” E Mathew, Director, Mathew Easow Fiscal Services, said, I think 2810 is a critical support as per my chartical analysis––give or take 50–60 odd points. That’s why one is seeing this heightened volatility because at this particular point of time, the bears also do not want to take a chance.” He added, “On Monday if we somehow recover above 2810 then the bulls could still try to claw back into the game.”

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