Rajini Panicker of Man Financials believes that there is still some more downside likely in commodities before a bounceback. Valuation of commodities is high, she says.

Panicker further says that there is lot of hedge fund money in commodities, but there is no bubble as yet. Copper is likely to fall another $400-500/tonne, she says.

Excerpts from CNBC-TV18's exclusive interview with Rajini Panicker:

What do you think the next step will be now? Do you think it will stabilise or could there be a deeper correction now?

Nothing has changed fundamentally. We could not find any concrete reason for the sell-off witnessed yesterday, but rumours of huge short volatility positions and huge structured out positions resulted in a sell-off.

Going forward, there may be some more downside. But post that, we should see some buying coming into the markets again.

Is this market looking like anywhere near a bubble territory?

We wouldn't call this a bubble because there is the global growth story. Commodity market has been a market, which is under invested. In terms of ratios, valuations do look high. This is because there is a lot of hedge fund money that has come into this market, but it would be premature to say that it is a bubble.

Do you think copper can hold on at these levels, or do you see a 20-30% down side from this level?

China with a stronger Yuan, may just get more strong with its purchases. Another tilt to the story is that a strong currency might affect its growth and therefore the demand might not just come in. So there are many school of thoughts that keep flying up and down.

It has been a market that has seen huge gains and therefore corrections like this should be expected and should not be taken as the beginning of an end. If we just look at this from a technical perspective, I think it should see a downside of may be another $400-500 for copper and from there we should see it gaining back support and re-test its recent highs.

We had a similar fall a month ago but not as bad. It was a pure technical correction. Would you like to take a call on this one?

We saw the same fall around April 20 or so, when we did see gold in a range of $40. But after that, we did see prices rally and hit 26 year highs. I think we are just going to see a rebound again.

By the time the pull back happened yesterday, would you have covered your shorts if you had short positions on these metals?

I think we would have got stocked out.

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