Market to remain range bound: Avinash Gorakshekar, Anagram Capital Ltd

Avinash Gorakshekar, Head Of Research, Anagram Capital Ltd, in a chat with ET Now talks about the markets.

What are you advising clients this morning?

We are telling clients to be little cautious because the way the markets have been behaving, it is going to remain very range bound. We would be more comfortable and very confident about specific stock calls rather than taking a view on the markets because the markets are now probably in a very tight range - 5515 and on the downside, 5350.

So there would be more stock specific action. So we are telling clients to get into stocks where valuations look to be attractive and where FY11 and FY12 numbers - in terms of earnings growth – look good because now the earnings season has just got completed. So we are telling clients to get into more on the midcap side where good amount of value is still left and can take a medium term call.

Do you think we can be fully decoupled from the global activity that we have seen?

To a very large extent, we cannot decouple ourselves completely. Whatever happens in the US and the Europe, definitely has an impact on the Indian markets and to that extent, definitely Indian markets would be guided by the global movement. Bt typically if you see the rate of the resistance and rate of comfort the FIIs have been putting on the Indian markets, if you see the FII flows in the month of July and even in the month of August till now, one comforting factor is that FIIs have been putting in a considerable amount of money on the market side, especially on the delivery side. So that gives a certain amount of comfort that the markets are not in risky kind of uncomfortable zones, although valuations on a very broad basis definitely look fair to quite neatly priced.

So going forward, if anything very big negative happens on the global markets, then only you could see a big correction on the markets. Otherwise, I am pretty confident that the Indian markets are in a pretty fine nick. In fact, 5400 levels have actually been reached for the Nifty after a lot of consolidation. It has not happened in a very short time. Since FIIs do have a big bearing on the market, Indian markets could possibly face some very big selling pressure only if the trend reverses.