Worst not over! Nifty around 19K would be a good point to relook again: Andrew Holland

economictimes.indiatimes.com:

Andrew Holland, CEO, Avendus Capital, says “I do not think we are out of the woods yet. I would not be surprised if the Nifty was to go downward to around 19,000, it would be a good point to relook again. But at the moment, even though we remain in this small trading range, the risks are more to the downside, particularly because of the banking index.”Many are questioning whether the market is getting overheated or not. Some of the froth has definitely come off from the top. But do you think there is still a meaningful correction in store or this is just a temporary blip that one has seen and maybe the worst of it got over last week? I am not sure that the worst of it is over yet but it is a temporary blip in terms of the market fall.

We got to very much overbought conditions and we have had a few factors to help bring the market down. What is going to continue to drag the market is going to be the banking sector because after the RBI policy last week, which in some respects you could say his speech was a little bit more dovish but his actions were more hawkish. We effectively had nearly a rate hike with the increase in CRR.

This is a time when banks are all chasing deposits. So, it is going to be highly competitive. We have seen the rupee hit 83, 10-year bond yields at 7.2%.

Everything is working against the market at the moment. And of course, with the news that the monsoons are a little bit below expectations, we still have El Nino to play out at the back end of this month into September. Those are the factors where the market is hoping for the best.

But maybe the banking sector is telling us that that is not the case at the moment. I do not think we are out of the woods yet. I would not be surprised if the Nifty was