Sridhar Sivaram, investment director, Enam Holdings, on Monday advised investors to be "very cautious" saying that it is a sharp bear market rally that we are witnessing.

“I am not in the camp which believes that this is a bull market. I think this is a very sharp bear market rally. We know that a lot of the economic parameters don’t add up, a lot of liquidity is sloshing around. So am I surprised with the speed of the rally? Yes I am. But I think it will be very difficult for this to continue for too long unless we get support from the economy, support from the earnings. It is time for people to be very cautious,” he said in an interview with CNBC-TV18.

“The data, the results, the economy and everything else doesn’t support economic rally like this and we have seen many rallies like these in the past, which haven’t been supported by earnings or the economic data and then they result in a disaster. So I will be very cautious at this stage,” he added.

Speaking about banks, he further mentioned, “Banks even now are down about 20-25 percent year-to-date, so I think the market is worried about it and rightly so. I would also be worried about this. There is NPAs, which will come; the question is how much. That is the guess. Reserve Bank of India (RBI) has given us some sort of guidance and if we have to go with what RBI has given us then this is a space that we have to be very cautious about.”