Mkts bounce back: What are experts suggesting?

After two days of mayhem at the markets, there has been some attempt of a smart bounceback today. The markets opened the trade today with over 900 points gain in Sensex and nearly 200 points in Nifty. All the Sensex index were in green with substantial gains. The bounce back was supported by the strong cues from the Asian markets.

PN Vijay, Portfolio Manager, said, "Over the next week or two, I definitely expect some buying to emerge. In the last two days, there has been a severe cutting of positions by brokers and banks on clients who do not come up with the margins. In the last two days markets have been driven by the market internals and my sense is that between today and tomorrow heavy FII selling should get slowly eased out as liquidity comes to these intermediaries. Going forward, the market is a screaming buy at this stage for retail investors. There is a World Bank report, which said that India among the large countries is the least dependent on the US for its economic growth. So the retail investor should just forget what the foreigners are saying and just keep picking up good stocks."

Manish Chokhani, MD of Enam Financial Consultant, said, "We remain in a bull market; we remain in a corrective phase in a bull market and like we have spoken in the past, one would have had three sources of potential supply to the market; one was the prop books, IPO and the leverage positions and all three have coincided fabulously in January to give what I think is a great buying opportunity to investors."

However, FIIs are not very optimistic. Adrian Mowat of JP Morgan thinks that market volatility will fall and people's confidence will reassert itself. The markets this morning are quite encouraging, rather than aggressive. He said, "I think India will still see net foreign selling; the market had two sharp days of fall, but it generally has been outperforming in the last three months than other emerging markets. It continues to have quite a substantial valuation premium, so I would expect India to underperform and therefore for foreigners to be net sellers."