Liquidity the main cause for bullish sentiment: Julius Baer

Asian markets surged today, boosted by a strong rebound on Wall Street overnight. Hong Kong's Hang Seng surged 3.41% or 948.36 points at 28,751.71.

Japan's Nikkei gained 1.84% or 278.82 points at 15,405.45.Taiwan's Taiwan Weighted rose 2.8% or 244.29 points at 8,971.50.Singapore's Straits Times advanced 1.62% or 56.39 points at 3,531.86.South Korea's Seoul Composite was up 1.48% or 28.67 points at 1,961.56.

Nimeesha Takalkar, Equity Research Asia at Julius Baer says negative news seems to make smaller impact on Asian markets and that excess liquidity has provided a tremendous bullish sentiment.

She further adds that she would look at selective markets and selective stocks within those markets.

Excerpts from CNBC-TV18's exclusive interview with Nimeesha Takalkar:

Q: What is your sense though, you think it is a temporary sort of movement that we are seeing all across Asia following Wall Street and the lower crude impact and Bank of Japan leaving the rates unchanged?

A: I think excess liquidity has provided tremendous bullish sentiment to the market for a very long time now. The negative news seems to take much smaller impact and we find every possible reason to bounce back and possibly bounce back with a vengeance. But how long this will last, how sustainable this is, is a big question mark but I guess the party is on for now.

Q: Do you see this as a sort of short-term buying opportunity, you have got key inflation data coming out this week, do you expect that to dampen sentiment or do you expect things to get better from now on?

A: I would actually look very selectively at markets and stocks. I would pick up those markets, which are showing a certain amount of resilience and where the domestic consumption story is much stronger than the export dependence.

Within those countries I would pick up on those stocks which have a much larger domestic footing like the infrastructure stories, the cement stories or those that have much lower dependence on external factors particularly what the negative news may flow out of credit markets or the hike in oil prices.

Q: What is your call in India because we are seeing key political developments and like you have pointed out a fair amount of resilience also to what has been happening globally?

A: I think this is a peculiar market where the resilience comes from two factors; one is the domestic consumption, which is a large part of GDP. The fact that export dependence is much lower, it makes it attractive for foreign investments. Within the home ground I think certain stories like infrastructure in particular has provided lot of scope for moving up. I think the resilience that we see is basically on these grounds.

Although the threat from oil prices despite everything does linger on and inflation does remain one of the major concerns within India. On agri-products as well as on crude oil moving up, how long the government current account deficit can absorb this is a huge question mark.