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In an exclusive conversation with ET Now, Big Bull Rakesh Jhunjhunwala says that he is concerned about the impact of inflation on Indian equities and it is indeed the biggest risk for the markets. He says that the next 3 months are likely to be very difficult period for the markets. Excerpts:
What is your view on the markets?
The next three months are going to be a very difficult period for the markets. The chances to break down to me seem to be greater than the chances to break up, at least in the next three months.
Do you see 5000 acting as a base for this market?
That is difficult to say, but I would think so, 4800-5000 is a level where markets will surely find a base, strong support which goes there.
:So what is the biggest risk for Indian markets currently?
The headwinds are on Indian markets, the most important thing is inflation. Because inflation controls everything, interest rates, growth and the second headwind is the government inaction. Although we have very good people at the helm of government and they know what needs to be done, but politically they are not able to give any consensus at all.
There was hopes of some big reform after the elections, but nothing has happened up until now. And unless we get some kind of a reform in the subsidies and some kind of a clear roadmap for the DTC and goods and sales tax, GST, the markets are waiting for that.
But would you bang the table and say that or predict rather that in next 3 years, Sensex will be at least 50% higher than where it is?
I am extremely bullish in the longer period. Three months unless and until we get clarity on the monsoons which we will get by August end, and we will see what kind of government action comes through. Until then, the markets are going to have a downward bias. Three years, 5 years, 10 years, I am extremely bullish.
Do you think the golden period for Indian equities is not over?
It has not even started.
Let me get this right and this is one point I do not want to get it wrong for our viewers, near term you are not bullish, but your long-term outlook is still intact.
Absolutely and near term I mean until things clarify and it depends how events turn out. If the monsoon is good and commodity prices ease which I personally expect, oil prices should be at $80-85 and some government action comes through and inflation may not have come down, but it becomes apparent that in future months, inflation is going to come down, then the Indian markets will have a very strong ride after that.
So I am saying that the next 2 to 3 months are uncertain depending on how events turn out. The period for the next 9 months could be very good or could be okay.
But is the rampant speculation in commodities over?
I do not think so. Speculation in commodities is at an all-time high.
But insiders tell me that you have been short commodities of late.
Yes, I am shorting some commodities. I am short.
What is your view on the markets?
The next three months are going to be a very difficult period for the markets. The chances to break down to me seem to be greater than the chances to break up, at least in the next three months.
Do you see 5000 acting as a base for this market?
That is difficult to say, but I would think so, 4800-5000 is a level where markets will surely find a base, strong support which goes there.
:So what is the biggest risk for Indian markets currently?
The headwinds are on Indian markets, the most important thing is inflation. Because inflation controls everything, interest rates, growth and the second headwind is the government inaction. Although we have very good people at the helm of government and they know what needs to be done, but politically they are not able to give any consensus at all.
There was hopes of some big reform after the elections, but nothing has happened up until now. And unless we get some kind of a reform in the subsidies and some kind of a clear roadmap for the DTC and goods and sales tax, GST, the markets are waiting for that.
But would you bang the table and say that or predict rather that in next 3 years, Sensex will be at least 50% higher than where it is?
I am extremely bullish in the longer period. Three months unless and until we get clarity on the monsoons which we will get by August end, and we will see what kind of government action comes through. Until then, the markets are going to have a downward bias. Three years, 5 years, 10 years, I am extremely bullish.
Do you think the golden period for Indian equities is not over?
It has not even started.
Let me get this right and this is one point I do not want to get it wrong for our viewers, near term you are not bullish, but your long-term outlook is still intact.
Absolutely and near term I mean until things clarify and it depends how events turn out. If the monsoon is good and commodity prices ease which I personally expect, oil prices should be at $80-85 and some government action comes through and inflation may not have come down, but it becomes apparent that in future months, inflation is going to come down, then the Indian markets will have a very strong ride after that.
So I am saying that the next 2 to 3 months are uncertain depending on how events turn out. The period for the next 9 months could be very good or could be okay.
But is the rampant speculation in commodities over?
I do not think so. Speculation in commodities is at an all-time high.
But insiders tell me that you have been short commodities of late.
Yes, I am shorting some commodities. I am short.
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