'Bias to remain positive till Budget'

RL Narayanan, Vice president-Institutional sales, Bonanza Group spoke with Rex Cano about the market trend in the short and the long-term and the factors that are likely to affect them.

Where do you see the markets going forward from here in the short- and long-term?

At the the outset, will like to start the comments with a warning that prediction of the markets is dangerous & its better to follow the markets, But to answer the question there is a 60% probability of the market crossing 5500 before Budget and 20% probability of the market crossing all time high before Budget.

The reason for the same is emerging market as a pack has given close to 130% return last year and India has sound fundamentals, so the chances of FII flow coming in the first part of the current year is very high, which can propel the markets to greater heights. But steady raise in dollar can dampen the flow.

Secondly govt is planning to raise more than Rs 20,000 crore before budget so the chances of market coming down are less.

From $2billion reserves in 1991 to $285 billion reserve in 2009, India has come a long way and mile's to go from here. The seeds of reforms sown in 1991 have become trees, the fruits are already visible and much to come so one has to be ready for harvesting in the markets. Very much positive for the long term, sectors to watch will be power, infrastructure and technology. Investment into Indian index can also be a good option as it is inflationary in nature and will remain the same way for the years to come. India with its young talent has a potential to become a knowledge hub

What are the factors are likely to affect the markets?

Local Factors like bad monsoon, fiscal deficit of close to 7% of the GDP, higher inflation rates leading to gradual increase in Interest rates.

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