Amount of fall seen in stocks is alarming, says Udayan Mukherjee
Sharing his views and outlook on the market, Udayan Mukherjee of CNBC-TV18, on Monday said that the amount of fall seen in stocks was "quite alarming".
“My problem is not with the index, it is with the broader market ... the smallcap and the midcap indices are down 4-5 percent. You look at individual portfolios, I think the cut is more like 7-8 percent ... The index is stuck in a range. We will know after the budget whether we can break out of 11,000, which we are struggling to do or we break down below 10,600 which has held for the moment ... a lot of damage is happening at the individual level. The amount of fall that we have seen in many of these individual names is quite alarming. So I think the market mood is quite sombre right now and we have just started the year, which is the election year, so it makes me a little wary of what lies ahead,” he said.
Talking specifically about Zee Entertainment, he said, “There is clearly some problem at the promoter debt level regarding Zee and that is clearly the reason why the stock has come off so alarmingly and it is not a small stock, it is Zee, which is the largest entertainment stock we have. So it is a serious business..."
Speaking about Larsen and Toubro (L&T), he said, “The numbers are good. The management sounds quite optimistic about the prospects as well. So it is a classic blue-chip, which has gone through many years of a fair degree of underperformance. This might well be an opportunity.”
On Budget 2019 expectations, he said, “I think the market has factored some of it in. Also, you must grant some intelligence to the market. In our obsession of 3.3 or 3.5, the market knows that none of these numbers are the fiscal deficit numbers. You look at what is happening outside of the budget. These are numbers which government wants to present. I think the market can easily see through them and it expects fully that there will be some giveaways in this budget. It is not particular to this government, any government does it on the year of the election and the market fully expects it ... so I think these are the two clusters I would be focused on -- consumption and anything to do with the bond yield in terms of tailoring the portfolio. Otherwise the event will come and go and unless something major gets announced, we will be talking about other things the next week.”
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