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Bull mkt not going away, 8500 key support: Jagdish Malkani

With the market falling again after a savage fall yesterday, CNBC-TV18’s Nigel D’Souza and Sumaira Abidi spoke to veteran broker Jagdish Malkani to get his views on the market.

“The bull market is not going to go away in a hurry,” he said. “8,500 should be a very big support level.”

“[After that] it will be back to the leaders of the rally so far, which will be private banks, even IT,” he said.

Below is the transcript of the interview on CNBC-TV18.

Nigel: After a 180-point cut on the Nifty, we are sitting with another 50-point cut today. With about 250 points down in two trading sessions, is it a good time to buy?

A: Yes, I still think the bull market is not going to go away in a hurry. If you take an intraday high the other day, 9,100-9,120 thereabouts, it was a big fall but the market needed an excuse to do some profit booking.

Over the weekend Wall Street was weak and also generally some sluggish news from China also so if you have to look from fundamental reasons, maybe again question marks on Greece although ECB started the quantitative easing (QE) operation yesterday, there should be more liquidity.

Of course some amount of despondency on the domestic political front [is there] clearly. The government is finding it tough to push through the land bill and some of the bills, which the market is keenly expecting the amendments.

Sumaira: So should we say that it is just profit booking or do you think it is the March factor where people are looking to perhaps take money off the table?

A: I am sure there is a bit of that but — it is kind of both. The profit taking whether it is due in March and also the run up has been very heady. Where it will stop? I think it will stop — 8,500 should be a very big support level etc.

And it will be back to the leaders of the rally so far, which will be private banks, even IT, though TCS has given some muted guidance, and with it has taken all the other biggies which probably is unwarranted.

Nigel: Talking about private banks and financial institutions, HDFC , Kotak Mahindra Bank  and Axis Bank  have lost 5.5-6 percent in two days. Are these dips buying opportunities?

A: I feel so. The bull market is not going to go away in a hurry and these have been the leaders of the market, the names you have mentioned and some more. So I think it will be back to that.

Right now it is a sort of a flight to safety which is why you had Lever yesterday almost touching Rs 1,000 and some of the big FMCG names but I think it should be, maybe a couple of more sessions of soft and sluggish markets then it should be back to business.

Sumaira: Given that the market is now below that 8,700 mark, perhaps we may even see a close below that level, would you advise traders at least to initiate an intraday short or do you think it is too volatile even for that?

A: I don’t believe the bull market is going to go away. So going short is a rather dangerous strategy because ultimately we are in a bull market and unless that basic trend changes, it is very dangerous to play.

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