Crude, earnings more imp than govt trust vote: ICICI Pru

Excerpts from CNBC-TV18’s exclusive interview with Puneet Nanda:

Q: What is your sense of what lies in store over the next 48 hours and how the markets might digest the news either way?

A: On the trust vote I think it is too close to call. But I think from the market perspective obviously the vote going through will be short-term positive, I think for longer-term investors it is not going to have too much of an effect, unless the government is able to take some significant policy decisions and the Prime Minister has actually indicated that they would like to do that, but whether they are able to do or not, I really don’t know. But I think for longer-term investors the macro scenario of what is happening on oil and there is actually been some good news on oil over the last 2-3 days and the earnings is what matters most.

Q: There is also one view that even if oil were to cool off a little bit, equity market might continue to under perform and go through a sticky phase- do you think that could also be a likely scenario for our markets?

A: One cannot rule out anything. In Indian given that we have such a huge oil import bill, if oil really comes off, I think the macro scenario will start looking significantly better because of which I personally believe equity markets will react positively.

Q: We were just talking about a specific talk and how they are concerned about the infrastructure growth over the next few quarters- how are you approaching infrastructure, construction as a space?

A: Clearly there are concerns over there; I think concerns both on the margins as well on the topline side. There are slightly different concerns in the construction versus the infrastructure space; but having said that we remain circumspect on both the sectors.

Q: Do you think the resolution on the political front either way will lend long-term or medium-term direction to this market or by the end of this week the market would have moved on and to focus back on some of the other big factors?

A: I think the markets will move on and focusing on the other big factors; unless of course they start making some significant policy announcement things like divestment or FDI, on banking, insurance - these kinds of things. If markets start believing some of that can genuinely happen, then of course it is a big positive. Currently I think it is too early to take a call on that. So I would say that the market is going to focus more on earnings and the macro picture rather than the trust vote, though of course, there is lot of excitement over the next two-three days that will continue to remain.