The markets have been on a downward slope since central banks across the globe have started increasing interest rates to control inflation. In the last one month, the Nifty50 has fallen almost six percent while the Sensex has seen around 2,900 points being shaved off.

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Neelkanth Mishra, the Asia Pacific and India equity strategist at Credit Suisse, believes it is too early to say that the market has bottomed out.

"The problem for the Indian market is global equities. So, because the P/E multiple (price to earnings — shows how much investors are willing to pay) for the world is coming off, I think the risk to P/E multiples in India as well remains quite high. Our premium to the world and premium to emerging markets remain elevated," he told CNBC-TV18.

Sanjeev Bikhchandani, Executive Director at Info Edge, says that global uncertainty has made predicting the course of near-term action difficult.

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"We are unwilling to predict beyond one quarter. We are taking quarter on quarter because, given the uncertainty in the last two and a half years since COVID, we've learned it's best to go with the flow and take it as it comes and not predict too far ahead because you don't know what is going to happen. There's far too much uncertainty, whether it's Ukraine, whether it's US-China, whether it's India-China, whether it is anything. Therefore you don't try and predict beyond the point, you be flexible and go with the flow," he explained.

Credit Suisse’s Mishra pointed out that the global sell-off and premium valuations are hurting Indian equities and this is likely to translate into earnings cuts ahead.

The biggest uncertainty for the markets, as per Mishra, is the fiscal and monetary tightening by the US Federal Reserve and thus a talk of a recession is in the air. Similarly, the impact of the four months of Chinese lockdown has hurt growth.

When it comes to earnings, Credit Suisse expects a lower risk of cuts to financials, cement and staples while IT and materials are at highest risk of EPS (earnings per share) cuts.

"In our estimate, four months of Chinese COVID lockdowns are almost as bad for global goods demand as a US recession. So I think all of these uncertainties are going to be overhangs. The markets technically look oversold," he said.

For the full interview, where Mishra also quantifies the impact on earnings going ahead, watch the main video.

(Edited by : Abhishek Jha)

First Published:Jun 20, 2022 3:05 PM IST