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Mkts taking a pause, focus on monsoons: Motilal Oswal AMC
The market has been witnessing a bout of turbulence since the past many trading sessions, but managed to extend its winning streak for the fourth consecutive day on Monday. "It seems to be now taking a pause," says Nitin Rakesh of Motilal Oswal AMC.
The market has been witnessing a bout of turbulence since the past many trading sessions, but managed to extend its winning streak for the fourth consecutive day on Monday. "It seems to be now taking a pause," says Nitin Rakesh of Motilal Oswal Asset Management Company (AMC).
"With everything else quite of the global footing, clearly the focus has shifted back to some of the domestic events, like the monsoons," he says. However, he adds with caution that there is a need to watch out for volatility from the global markets.
Below is a verbatim transcript of the interview. Also watch the accompanying video.
Q: What is your sense? We have had the fall and pullback. Where from here through June?
A: After having gone through a bout of volatility, the markets seem to be taking a pause. The focus is shifted back to some of the domestic events in absence of any major cues even though that overhang still exists on us. There is clearly an event out there which is the monsoons, which people are going to look forward to because everything else in the domestic front points to a fairly stable situation and an environment whether it is the earnings which has just concluded for FY10. Projections for FY11 continue to be in fairly robust Sensex earnings 1050-1070 range for FY11. So I do not think we are worried about the domestic environment. We are watching the monsoon. We have to keep an eye out on the volatility front from a global perspective.
Q: Is that what you are picking up from the money as well? Has the nervousness abated a little bit there? Have the outflows stemmed a bit for this month?
A: May was a big outflow month. The way to look at it is even with USD 2-2.5 billion outflow, the market went down 10-11% and then came back fairly strongly and convincingly, even though the participation is still weak. Outflows and inflows will always drive short-term momentum and trends. So in the short-run we will always be volatile, but in the long run it is a voting machine and people will focus on the right fundamental factors.
