Indian markets will be volatile over the next few days, says Samir Arora, Helios Capital Management

Samir Arora, Fund Manager, Helios Capital Management in an interview with ET Now talks about the impact of the S&P downgrade on the Indian markets.

How do you think the Indian markets will react on the S&P downgrade?

For the next few days there may be volatility in India, which means that basically markets will remain down. However, this event per se will not add to all the problems that India and the world are facing. In India's case the problems are self created.

In a negative environment where this was expected, there were so many discussions publicly about downgrade and the fact that only one out of three agencies have done it, this event per se will not carry beyond a day or two its impact on the markets. The world in general is in a bad state and India has not helped itself in this process anyway.

Everyone has been talking about how the problems for India are more self induced than any other. How much of this kneejerk reaction could actually be witnessed by the market? What is the near term downside that we are staring at?

Well, percentage wise, may be 5%-7% but my problem is, in the recent weeks or months, we are positioning ourselves as only a beneficiary in a bad market for the world. Commodity prices will correct and therefore we will be benefited, which we will be the case but I do not like the idea that we are presenting ourselves as HPCLs to the world. When markets are bad and oil is falling we say let us buy HPCL because it benefits from lower oil prices.

There is no other positive ever given for HPCL except that world oil prices are down for some independent reason. Now India is presenting itself to the world as a place to invest in when oil is down, when the world is in crisis. That is not the only reason why people should come to India.

Up to 2007 even 2008 we had a genuine independent story and then that was helped or hurt by commodity prices and when commodity prices would fall it would help India. Now we have nothing to say on our own for ourselves except that oil is down and that is greatly positive for us which it is, but I just do not like that as the soft selling point for my market.