Expect fund managers to re-allocate portfolios: Devesh Kumar, Country Head, CIMB India

In a chat with ET Now, Devesh Kumar, Country Head, CIMB India shares his view on markets:

ET Now: I guess the bad news is obvious, it is rupee, it is Syria and what Fed could do but my question is not why Indian markets are falling, my question is how much more Indian markets could fall and is all the bad news in the price?

Devesh Kumar: Looking at the index level is not going to help but there will be re-allocation of portfolios and so that is what is going to happen. Bad news is not fully out yet, we feel that if you look at financials sector, some more bad news is expected and probably for next one to two quarters we could see some damage there. So next two quarters we will see couple of surprises in terms of the ones where people have lot of confidence getting slightly weaker.

I feel that export oriented pharma or forex revenue driven pharma companies are going to benefit over next one to two quarters mainly because of currency and the volume impact which they will have whereas there will be lot of re-allocation and next six months is going to remain volatile. If you look at daily trends then probably in the recent times we have seen a lot of damage and probably things should stabilise in the near term but I would not like to speculate on that, I feel that next six months until elections we could see some more damage to stock prices.