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    Markets riding on hope; positive as long as it lasts: Arindam Ghosh, BlackRidge Capital Advisors

    Synopsis

    'Bad news is perceived to be good news today. We are in an unusual kind of an environment. As long as it lasts, it is good.'

    ET Now
    In a chat with ET Now, Arindam Ghosh, CEO of BlackRidge Capital Advisors, shares his views on the market. Excerpts:

    ET Now: Are you surprised with the recent leg of market action? Just when it appeared that markets were running out of steam, bulls are back with a vengeance.

    Arindam Ghosh: I am not really surprised. The way the markets have been behaving over the last two to three months, the financial markets are running way ahead of the economic cycle. In a perverse way, bad news is today perceived to be good news. Hence, if you look at the entire euro area, you have three very large economies of Italy, France and Germany which are heading towards contraction, but there is hope that there is going to be an accommodative policy which will ignite the markets again. Thus, we are in a very unusual kind of an environment. As long as it lasts, it is good.

    ET Now: Do you think domestic institutional activity is of core importance for Indian markets all of a sudden because domestic institutional investors have turned net buyers?

    Arindam Ghosh: That is good news. FIIs have been pouring in money from the start of this year quite consistently and we had the domestic institutions which were not really participating in the market. Hence, it is good to see the domestic participation picking up and that is largely because of the fact that today we are in a situation where top down, India has started to look good once again.

    We have the advantage of a stable government, macroeconomic fundamentals have improved significantly, business confidence is getting restored and the government is making the right kind of noises - whether it is a structural shift from being completely service-led to focussing on manufacturing.

    We continue to be in a very envious position as opposed to other emerging market economies - whether it is Brazil or China - given that our growth and economic activity is starting to bottom out and that we are again inching closer to easing of the monetary cycle.

    Hence overall, that is why we are now pushing domestic investors to come to the market and participate. But we need to be a little careful here because a lot of stocks, which are not really of very high quality, have moved up. Investors need to stick to quality. Whilst it is good to see domestic participation increasing, they need to get a little selective when it comes to taking exposure to some of the stocks which have run up quite significantly.

    ET Now: At 7900 thereabouts, are we at the top end of the curve or do you think there is significant return to be made even from current levels?

    Arindam Ghosh: There are quite a few party poopers on the horizon. The interest rate hike possibility is going to be the biggest threat and with each passing day, we are getting closer to a situation where the tapering is going to come to an end. We will have this concoction of dollar strengthening, interest rate hikes and falling liquidity which can lead to a protracted kind of global risk off environment and emerging markets are going to get impacted. Thus, we have to keep that in mind. Things may turn suddenly and given the kind of one-way run-up that we have seen in the past. We need to be a little cautious at this point in time



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    Read More News on

    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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