It’s difficult to predict any degree of accuracy where coronavirus thing will blow up. Medically or from health perspective, it is impossible to hazard a guess. So, we should keep that aside,” said Udayan Mukherjee of CNBC-TV18.

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“Right now there are two opposing forces for market in the near-term. In the absence of any kind of prognosis with any certainty on the health front, one is liquidity, which inevitably is looking at the commentary from the US. Central banks are likely to once again loosen their purses and that is something which got the US market excited, and in the near term it is something which the market has to keep an eye on because it will have a reflating effect on stock prices,” he added.

“On the other hand we don’t know what the coronavirus impact will be medium-term on economic growth, and whether it’s powerful enough to tip even the US and the global economy into recession like condition – that is a clear and present danger. So fundamentally, we are in a weak spot but technically we may just have entered a sort of a strong spot. These are the opposing forces and we don’t know what it makes for but it’s conceivable that in the near-term unless the virus news becomes ugly over the next few days, you will get a rally,” added Mukherjee.

“I don’t know how powerful that rally will be. It depends on central bank’s action and commentary, but we could pullback 300-400 points because the fall has been so sharp – the Dow fell 12 percent in 10 days, rallied 5 percent in one day. So we are in volatile times," he said adding that for investors it still makes sense to keep accumulating good quality names every time the Nifty is close to 11,000 mark.

Post that wait and watch what the virus does but we should not second guess that and we should not panic. Just keep doing what long-term investors always do after a very sharp fall -- accumulate good quality names and hope for the best,” he further added.

Stock specific, talking about HDFC Bank, Mukherjee said, “Personally, I would like to believe that HDFC Bank will not let its shareholders down. There is too much at stake out there and I doubt whether the market will be very unhappy with the person who takes over. The rest is in the realm of rumours.”

On PSBs, he mentioned, “I have never been a votary of public sector bank stocks. The only exception is that if you have to buy a PSU bank then it probably it is SBI and none of the others. However, I would still say, SBI included, stay a mile away from anything which is public sector, they just don’t create wealth.”

Disclosure:

Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes CNBCTV18.com.

First Published:Mar 3, 2020 10:35 AM IST