Never seen such pessimism\, says Jhunjhunwala

NEW DELHI: The Finance Minister’s weekend booster package for the economy and market could not help the domestic equity indices fend off the global rout.

And Big Bull Rakesh Jhunjhunwala said he has never seen such pessimism in the market. “It looks overdone,” he said.

In an exclusive interview with ETNOW, Jhunjhunwala said there is a buying opportunity in this market. “But I believe it is way too much to expect the market to rebound immediately.”

On Monday, the BSE Sensex opened 662 points higher, only to slip into the red within 10 minutes of trade. It was down 150 points at one point.

“There is no one thing that can revive sentiment. We need a series of measures to improve sentiment,” Jhunjhunwala said, adding that the steps taken by the FM will revive sentiment in the economy.

Finance Minister Nirmala Sitharaman unveiled a slew of measures post market hours on Friday to provide a much-needed healing touch to the economy and markets. She withdrew the new tax surcharge on overseas portfolio investors and restored pre-Budget provisions on long and short-term capital gains for both overseas and domestic investors.

The tax rollback is expected to have a favourable impact on foreign inflows next week, if global investors hold their nerves over trade war concerns. Data showed FPIs pulled out Rs 23,000 crore from domestic equities in July and August, after the Budget proposal to levy the surcharge on higher tax-income groups affected 40 per cent of FPIs, operating as trusts or AoPs, and made investment in Indian equities unattractive.

The FM also tried to ease liquidity flow and to make loans cheaper to boost consumer demand; unveiled steps to boost demand for cars to address the ongoing slowdown and introduced a transparent mechanism to end alleged tax harassment of businesses.

Nifty floor@10,500; midcaps to reward handsomely
Jhunjhunwala said the 10,500-10,750 range would act as a floor for Nifty50, which is unlikely to be broken easily. He sees opportunity in midcap stocks. “Whoever buys them at current levels will gain handsomely,” he said.

The Big Bull said the lower interest rate environment is here to say, but banks need to come back, and they ought to lend, he said.

The billionaire investor said savings will find home in financial markets, especially equities. He felt the ongoing US-China trade war would be a long-term positive for India.