May see upside but still in bear mkt rally: Shankar Sharma
Talking about the current pullback rally seen in the capital markets, Shankar Sharma of First Global said it fits the bill of a bear market rally. “The same underperforming markets — India, US, Italy, Japan — are leading the current pullback rally. Even in the US, beaten-down sectors like banks, insurance and related sectors are rallying and defensive plays are laggards. So this is a perfect script of a bear market rally. I wouldn’t be so brave to call it the start of a bull market,” Sharma said.
The markets were not out of the woods yet and 2009 could see more pain ahead, Sharma said. “2008 was an easy year and the second half of this year could be trickier,” he said, adding that in the immediate term though, the Sensex could reach 12,500 but it won’t be a straight move. “The momentum may sustain but the quality of this rally is worsening due to bad internals — one sees many stocks are going down even as the markets are rallying.”