Oct 19, 2010, 02.33 PM | Source: CNBC-TV18
Ralph Acampora, New York Institute of Finance is bullish on the Indian market. In an interview to CNBC-TV18, Acampora said India has potential for another 15-20% upside.
Ralph Acampora of New York Institute of Finance is bullish on the Indian market. In an interview to CNBC-TV18, Acampora said India has potential for another 15-20% upside.
He explained, “I think the Indian market for the first half of this year was relatively flat like most other markets, but that flatness set the stage for the strength that you are seeing now. I don't think the strength is over. In fact I would not be surprised if you had at least another 15-20% upside potential, generally speaking for the Indian market.”
Acampora is also optimistic on the US markets. According to him, quantitative easing (QE) will pump in energy in the global economy.
He is expecting Dow to eventually climb to 12500-13000 while S&P is likely to 1250-1300 in some months.
Here is the verbatim transcript of Ralph Acampora interview with Udayan Mukherjee and Sonia Shenoy on CNBC-TV18. Also watch the accompanying video.
Q: Where do you see the Indian markets headed from here—we have just stopped short of an all-time high?
A: The Indian market for the first half of this year was relatively flat like most other markets. But that flatness set the stage for the strength that you are seeing now and I don't think the strength is over. In fact, I would not be surprised if you had at least another 15-20% upside potential generally speaking for the Indian market.
Q: How is India poised versus other global markets currently?
A: India has led, obviously, most of the countries and I think it's just a matter of a game of catch up. I think China is doing it. I am very-very optimistic about US markets. I am very optimistic about, for example, midcap stocks in Germany. The world, globally, after the last six to eight months of digesting all of the negative news—I have an old saying, “When bad news can take the stock market down, that's good news.” And I think you and I the rest of the world has been fed a bevy of bad news for the past six months and most markets has held up fairly well and I think we have better news ahead. A part of it will be the easing, the quantitative easing two (QE2) in the US. I think we will benefit, so it's a global optimistic picture that I have.
Q: If you are optimistic about the US markets what kind of levels can you play for the Dow or the S&P from here on?
A: Looking at the Dow, for example, I see the 11,000 level broken. The next normal level for the Dow will be 12,000. The momentum in the broadness of this market suggests that 12,500-13,000, in case of the S&P 500 it will be 1,250-1,300, I think is very doable over the next several months
Q: What about the Dollar Index? It hasn’t been able to recover quite a bit above that 77 mark. What kind of correlation you expect that to have with commodities?
A: You are absolutely right dollar is having huge impact on commodities and other currencies and specially gold of course. At some point the US will come up with some plan to ease and I think that will continue to put pressure on the dollar and I think currencies around the world will react accordingly and ultimately gold moves higher. Actually this is very good for the stock markets, at least I would say for the next three-six months.
After that of course the reality of potential inflation might rear its ugly head but that's months away it’s not near-term.
Q: What about volatility? Do you see that picking up over the next few weeks because volatility has been quite subdued in the US? Do you see this period of very benign and low volatility continuing for the next few weeks which is generally quite supportive for equity prices?
A: The VIX actually in the last couple of days has been making new lows as you know and that is the sign of less fear, less anxiety and I think that is the part of the strength that you are seeing in marketplace. I'll be concerned a little bit if the VIX and I think VIX gets down to around 15 levels.
In the past that has been coincident with market peaks but if I am right and the global market is stronger than most people expect I see at least a drop to 15 on the VIX and may be even little lower. At some point it will be a source of concern but not in the near term. In fact I look at that new low in the VIX as confirmation that the strength in the market is to be believed and I interpret that all as big-big positive.
Q: Give us your expectations on crude and gold as well?
A: The level you just mentioned USD 80 per barrel to me just was a round number that I think served as little bit of hesitation or resistance level. All things being equal, I think crude works its way up to USD 85 maybe even USD 90 at some point. As far as gold, is concerned it’s at all-time new high, so there is no particular level that's of any concern. I must say that most of these markets started with the dollar being very accelerated to the down side and the euro being very accelerated to the upside—I think that plus crude and may be gold on the very short-term basis probably need to correct.
In the case of the dollar I wouldn't be surprised to get a little bit of bounce but that’s only temporary and I think the trends that are in force will continue.