Speaking to The Financial Express, Prudential ICICI Asset Management Company managing director (MD) designate Shailendra Bhandari stated that despite the fall in the stock market, further fall is unlikely to happen and at the most the Sensex can fall to 3,800 levels.

However, Mr Bhandari is optimistic about the old economy stocks, which have performed well in the last couple months. "These brick and mortar companies, which have taken a beating, are again back in limelight. It is the valuation game that finally counts in the stock markets."

Even at these levels, when some of the old economy companies shares have appreciated by over 50 per cent, there is still lot of growth potential in these companies.

These companies have been growing at a steady pace of 10 per cent to 15 per cent, but why was there a fall in their share prices? "There is nothing wrong with them, but still market is not attracted to these stocks," he stated.

With institutional investors realising the potential, there is again demand for these stocks and that would further increase.

Another sector where the Mr Bhandari is bullish is the banking sector. Having worked with HDFC Bank, he thinks that this is the sector where the market has not taken a serious look. "Even tough the merger and acquisition game in the sector has attracted interest in some of the private sector banks, but the public sector banks still look very cheap compared to their instrinsic value."

The new economy stocks are still among the top holdings of most of the fund managers and are likely to hold the strength but not of the same magnitude as that seen in early this year.

But Mr Bandari was still reluctant to talk of the Prudential ICICI mutual fund strategy as he was yet to take charge from the out-going MD Ajay Srinivisan, who is set to move to HongKong as head of the Prudential to explore and set-up Mutual Fund business in South-East Asia.

Mr Bhandari officially takes charge on December 27.