Markets to go down further by 5-10% from current levels: Ramanathan K

Ramanathan K, CIO, ING Investment Management India, talks to ET Now on market outlook.

Given that we have broken 4800 on the downside, what’s worst case scenario that you are factoring in for the benchmark indices?

You could see markets go down further by 5-10% from current levels. One clearly has seen the impact of the IIP numbers. Growth surely is stalling significantly much lower than expected. You could see another quarter of very poor growth. While consensus estimates earlier pegged GDP at around 7.5%, it looks like it will be less than 7% for this year, so obviously the worry will be that what’s going to happen next year.

Will the earnings growth, which is expected at 12-13% this year be lower than that next year? If it is so, the market would de-rate from current levels also. We are a bit defensive across our portfolios. Cash levels are high. We are underweight high beta sectors like metals, capital goods, banks and overweight consumer discretionary staples and pharma.