Mkt in comfort zone; see potential for upside: Dimensions

Ajay Srivastava of Dimensions Consulting feels everybody's a little more comfortable with markets at this point in time. The policy outcome has been quite positive. He said, "Also we are not going to see draconian measures to curb money supply, so there could be more potential for upside."

He expects May to be a lacklustre month and barring a few sectors like banks, he doesn't see any major activity in markets.

Excerpts from CNBC-TV18's exclusive interview with Ajay Srivastava:

Q: We have had nice little rally from 15,000 to 17,500. In the near-term do you see more upside?

A: I think everybody is little more comfortable with the market and the big paradigm shift has taken place that the government has come up with the fact that they are going to use more fiscal policies than just monetary policies to control inflation. That has given a lot of relief to the banks, the real estate sector etc that we are not going to see draconian measures to control money supply. So there is lot more comfort built into the major sectors, like real estate, capital goods and banking which gives credence to the fact that there could be a potential for more upside than a significant downside.

Q: You think in May you could go up to 19,000 levels or is that pushing it?

A: May will be a lacklustre month in our view because there is a fatigue built into upside at this point of time barring a few sectors like banks. I am not sure there is going to be significant activity by and large in the market. So May is going to be more like a steady month, will not see major upside but certain sectors will get rerated.

Q: What do you think would be the best sectors to follow in the month of May now that earnings are over?

A: I think banking would remain the safest bet because quite a bit of downside is out of the way; there is reasonable upside building in the system in terms of business, traction and revenues. So one would tend to be safer in terms of banking, in terms of returns to risk metrics in the month of May.

Q: What’s your gut feeling? Is the worst over for the market or do you attach a high probability this summer of going back and retesting the lows where we bounced from?

A: I think if inflation doesn’t come down drastically in the next month, there could be some serious action on the fiscal side and a fiscal side action is always a positive. So overall we are saying that the month of May should be a positive. We are not expecting a totally chartbuster month of May, but we are definitely expecting consolidation, much more buying in the system and certainly a stronger May.