Jagannadham Thunuguntla, Strategist and Head of Research, SMC Global Securities spoke to Puneet Wadhwa on the markets

 What is your assessment of the newsflow from the euro-zone since the past few days?

The situation in euro-zone is still uncertain, and the euro policy makers are trying their level best to handle this uncertainty. The problems are deep routed and may take much longer to resolve. However, as long as the ECB is pumping in liquidity, it is good news for emerging markets such as India.

The Indian markets have been trading volatile since the last one week. Till when is this likely to continue? Do you think that a correction is now overdue?

As the rally has been so strong since the beginning of the New Year, there is always a chance of profit booking. Also, as the Reserve Bank of India (RBI) is expected to cut the interest rates during this year, the momentum in the markets can remain strong.

Do you expect the Indian markets to attract a significant quantum of FII money this year as compared to the other emerging markets? Why?

FII money is quick money. It tends to move fast, both in terms of inflows as well as outflows. Further, the support by the regulators such as the US Federal reserve (Fed) and ECB will ensure that the liquidity is maintained. Both these central banks are turning out to be cheerleaders for markets.

What is your investment strategy given the current scenario? Which sectors are you bullish on at the current levels?

The Indian market is turning out to be a traders market instead of investors market. It has been more than four years since the long-term investors actually made money in India. However, the traders will always have opportunity along with volatility. The market participants shall be very stock specific.

What are the key takeaways, according to you, from the December quarter results of India Inc? Were there any sectors / companies that did not meet your expectations?

The December results season is not as bad as originally feared. Overall, the revenues have indicated strength. Only thing negative that we observed was some stress on profitability margins. I would say that the results season was a mixed bag.

Telecom sector has been in news (licence cancellations/ Q3 earnings etc). What are your views on this space?

Bharti is a clear winner on any metric. If their African acquisition starts yielding desired results, there can be fresh rally in the stock.

The Mid and Small-cap sectors have done quite well as compared to the benchmark indices. Any particular stock that you would like to highlight from a near-to-medium term perspective?

There are several stocks which have been treated very harshly by the markets last year such as Crompton Greaves, Voltas, Jain Irrigation, Syndicate bank, UCO Bank, etc. These offer good investment opportunities on every dip.

How do you expect the Rupee and bond yields to pan out in the near-to-medium term?

With significant intervention by the RBI, Rupee appears to stabilising now. However, in comparison to historic trends, it has become highly volatile.