Moneycontrol
Nov 17, 2017 04:17 PM IST | Source: CNBC-TV18

Drivers of liquidity still in place but market looks overvalued: UBS's Chhaochharia

If one were to look at the underlying fundamentals then the market looks overvalued but currently they are driven by liquidity, which is still in place, said Gautam Chhaochharia, ED & Head-India Research, UBS.

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Gautam Chhaochharia, ED & Head-India Research, UBS talking about the outlook for the market post the upgrade by Moody’s and the last day of their UBS India Conference said the upgrade helped boost investor sentiment.

However, it does not really affect the fundamentals of the market but is more a reflection of what has been done and the credit spreads, yields etc are not determined by ratings, he said, adding that it was already priced-in.

Talking about the impact of higher crude prices on India, he said although crude is a big risk for India, crude remaining at these levels for a while may not impact market sentiment. However, if it spikes in short period of time, then it may hurt sentiment.

So, at this point in time, it might not change investors' perception about Indian macros or market outlook but there is need to keep a close eye on crude, said Chhaochharia.

When asked if market would likely make new highs, he said if one were to look at the underlying fundamentals then the market looks overvalued but currently they seem to be driven by liquidity. However the drivers of strong liquidity locally, still are in place because local investors have been making money and so as long as they make money, it is unlikely they will withdraw, he said.
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