It's too early to be positive on markets: Sandeep Bharadwaj

Sandeep Bharadwaj, Head India Equities, Derivium Tradition, talks to ET Now on market outlook.

How do you expect Indian markets will move in the near term, up, down or they are likely to remain sideways?

The volatility is very difficult to predict but from the earnings perspective what we see is that the deterioration in earnings has just begun, so it’s too early to be positive on the markets. We have been negative right from February onwards of this calendar year.

It will take at least 12 months for the earnings to bottom out but it does not mean that we start buying now. The next financial year in terms of earnings will be far worse than what we have seen now, so keeping that in mind we are not very bullish on the markets. We see substantial downside in the markets.

Fundamentally which is that one pocket, which is looking weakest wherein you can initiate shorts right now? Would it be the obvious ones, the PSU banks of the world as well as the metal names?

On the short side, the names have remained constant for almost 5-6 months, so yes, those are included in it. On the defensive side on the long side, it would be more on the pharma space. We like the pure oil story, Cairn India. We like the agriculture story on the tea side, so it is very selective on the long side including the telecoms, so short side is across the board pretty much.