Nifty and Banking sector would be on downside: Kunj Bansal, CIO, Sanlam India

In a chat with ET Now, Kunj Bansal, CIO, Sanlam India, shares his view on the Nifty outlook and Banking stocks:

ET Now: Nifty is down more than 200 points in less than two days. What would you attribute the reversal to—aftermath of credit policy or simple profit booking?

Kunj Bansal: It is back to the level where it was before the FED announcement of tapering deferment came in.

To that extent, the impact of credit policy is not there. If we include the credit policy impact, then probably the Nifty should be down further. Hence, those are the shorter signals in the market which will keep giving effect to the very short term movements of the market.

ET Now: With the weakness in the overall market, would banks continue to be at the lower end of the trading range?

Kunj Bansal: Yes, in the short term, we are in a market which is precariously poised. It has space to go on the downside than on the upside, as this will be backed by the numbers.

Soon, we will have second quarter results starting to come in. It does not look like those numbers are going to give great comfort in terms of asset quality, business growth and margin, thanks to the recent interest rate movements that we have had in the last one and a half months. Therefore, we have some downside left.