What do you see as a fair value for the Sensex?
We think the Sensex is fairly valued right now. In the short term, we expect the markets to be range-bound, with the Nifty trading between 4,800 and 5,200. In the medium to long term, however, we are positive and expect the Nifty to cross the 5,500 mark over the next six months to a year.
What are the push/pull factors affecting the markets currently? Where do you see the next trigger?
The main pressure is from too much paper issuance. Going forward, fourth quarter results and monsoons should provide the next triggers.
What sectors are you particularly bullish on?
We are clearly bullish on consumer durables, including auto and banking. We are also positive on infrastructure and industrials. Industrials should perform in the medium term once the capex cycle picks up. Among metals, we are positive on steel and aluminium.
What is your outlook on FII (foreign institutional investor) inflows? Where do you envisage worries regarding global shocks?
I am not very positive on FII inflows and don’t see any fresh money coming from any of the funds. I was surprised to see that FII inflows were an aggregate of over $2 billion as on March 10. The worries on global shocks come mainly from Europe, more than the impact of a hardening policy in China.
What is your view on cement stocks?
We are negative on cement because of a potential demand-supply mismatch that will show up in the numbers over the next two quarters and because the markets are still not taking cognisance of that.
