Market voice: Saurabh Jain, SMC Global Securities

'Indian growth story to reflect in banking'

Saurabh Jain, head – research (equity-retail), SMC Global Securities, tells Masoom Gupte that banking may not be able to yield the kind of returns it did in the past, but the sector will definitely be a market performer. Edited excerpts:

The markets have been volatile of late. Where do you see them heading in the short term?
Well, nervousness is certainly creeping up in the markets. International reasons like the European debt crisis, Korean war worries, Chinese slowdown and the domestic loan scam have taken a toll. At present, the downside looks capped at 5,600-5,700, with some kind of sanity coming back.

In the current scenario, at what levels can new investors consider entering the market?
I think short-term investors, or the ones who want to make quick money, can buy around the 5,600-5,700 levels, keeping a stoploss below these. For the long-term players, the jitters in the markets have provided some good levels, where they can invest a part of their investible surplus. In the wake of recent scams, realty, telecom as well as banking have been out of flavour. What is your outlook for these sectors?
In the realty sector, we have noticed developers are actually wary of revising prices upward. They do not want to disturb the demand scenario because of the huge supply, especially in Tier-I and Tier-II cities.

In telecom, I think the 3G revolution can bring some cheer to the industry. But, if anyone wants to invest in the space, it should be with a long-term perspective. Among telecom stocks, we are bullish on Bharti Airtel.

Banking may not be able repeat its past performance in terms of returns, but the sector will definitely be a market performer going forward. I think the Indian growth story will equally reflect in the banking sector, as it is a sort of heart and soul relationship. Concerns pertaining to asset quality and more provisioning due to the Reserve Bank of India norms may hurt profitability, which may reflect in the stocks.