What lies ahead for markets?

Markets are likely to see uncertainty for a few more weeks, says analyst Sangeeta Purushotam, Head, Institutional Business at Religare Securities.

There will be re-assessment of risk, but near-term volatility will continue according to Purushotam. Like most analysts, Purushotam's advice to investors is to start bottom-fishing with a one year perspective. It is premature to conclude long term damage to equity markets, she added.

Q: How do you read the global situation and how do you think things will eventually pan out?

A: We are likely to see this uncertainty for a few more weeks. These things don't really reverse overnight. It takes time to adjust and there could be some level of reassessment of risk, which is what we are really seeing. But, it’s important to focus on what lies ahead in the longer term. The longer term call on the markets remains positive. However, in the near term, we will see volatility and we will see uncertainty at least for the next 2-3 weeks.

Q: Do you see the possibility of substantial down side from here or have we reached levels from which one can start some purchases of good quality stocks? Or would you rather stay away?

A: If a long-term trend is positive then it's important to use a sharp fall in the markets as buying opportunities. We’ve seen some element of pain, there is a little bit more ahead, but here onwards it makes sense to start bottom fishing to some extent, particularly for people who are taking a year-plus view on the market. Every time markets have fallen in the last couple of years, there are interesting buying opportunities and good returns from there on. So I think that should really be used.

Q: What do you start looking at to buy first? Do you pick up stocks that have got hammered a lot and hence might be seen as a safe heaven of sorts?

A: It makes sense to pick up stocks that have got hammered a lot in this fall, because they are obviously higher meter stocks and when the markets rally, they are likely to show much higher gains. However, the only word of caution is that it should not be done blindly, you should pick up stocks, which have fallen where the longer-term story remains intact.