Vaibhav Sanghavi, director (Equities), Ambit Capital, tells Krishna Merchant he would rather wait for the uncertainity in the markets to lessen before he tries to invest.
How do you view the situation in Japan? Do you expect the Indian markets to slide further?
The initial reaction to such catastrophic events is that investors take the risk off the table, which would include India also.
Given the current market situation, what is your advice to investors?
In the immediate short term, there is a huge amount of uncertainty and it is not worth trading. I would rather stay away and look for a clear picture to emerge before getting back into the markets again. Any global investor would also, first remove the risks and wait for things to stabilise.
Is there a concern that global equities might enter into a bear phase?
Again, the state of the markets is dependent on events that are happening in Japan and West Asia. These events need to be taken into cognizance and we need to see when things stabilise, before taking a call on global equities.
Do you fell the crude prices might rise further?
If the Libyan crisis spreads to other countries, there may be a spike in crude oil prices. However, at the same time, we expect Japan to consume less amount of oil in the future, because huge part of their economy will be impacted. Hence, we expect short-term correction in oil.
Commodity related shares, especially metals, have corrected sharply. Do you see this as a good time to enter the stocks?
It is very difficult to assess the exact amount of damage in Japan. Once the risk is removed across asset classes, including commodities, prices would correct a bit.
Auto shares are leading the losses. Do you see more pain for the sector because of parts shortage?
I do not see that much of a worry. A large amount of the auto demand is local and a large part of manufacturing facilities are in India and little depends on Japan. In the immediate or short-term, this may seem to be a concern, but it should not be much of a worry from a long-term perspective.
