Markets to be range-bound in 2010: BoA ML

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Q: At BoA ML what are you Sensex earnings targets and your Sensex target as well for the next one year?

A: In terms of earnings, next year that is FY11, we are looking at around 25% growth, we are looking at earnings growing around 24% and the year after that we are at under 20%, so that's the sort of earnings growth we have. To put this in context, we have had two years of flattish growth, so what we are seeing in FY11 is a bounce after two years of big flattish growth coming.

Q: You do not expect any kind of surprises because in April you will have full year guidance from the IT majors as well from companies like Infosys. You do not expect to hear anything which surprises the street on the positive side?

A: I think there could be certain surprises in certain sectors and there could be a bit of disappointment. What I am not expecting is anything very major which takes the aggregate earnings growth up, so we are looking at around 24-25%. I do not think this is going to move in a very substantial way post April.

Q: What are you key overweight and underweight now at ML from a sectoral perspective?

A: We are overweight on banks, so that's one of our biggest overweight. We are still overweight on autos. Capital goods is the third sector, we are overweight on. We are also overweight on the pharmaceutical sector, so it's bunching of quite a few sectors.

In terms of underweight, we are underweight on the oil space. We are underweight on metals and utilities.