Nifty to remain ranged, crossing 5300 tough: Nilesh Shah

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Nifty to remain ranged, crossing 5300 tough: Nilesh Shah

Nilesh Shah, MD and CEO of Envision Capital believes the Nifty is likely to remain ranged.

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There seems to be no respite for investors from the market's volatility. Nilesh Shah, MD and CEO of Envision Capital believes the Nifty is likely to remain ranged, "It is tough to see Nifty crossing 5300," he told CNBC-TV18 in an interview.

The next major headwinds for the markets, according to Shah would be interest rates, inputs costs and inflation. The markets may have discounted high inflation, but inflation would have a spillover impact on interest rates, he said. Shah sees bond yields moving towards 8.25% mark.

On the recently closed issue of NMDC , Shah believes the stock may return some beta if iron ore prices surge.

Here is a verbatim transcript of Nilesh Shah's exclusive interview with CNBC-TV18. Also watch the accompanying video.

Q: What is your sense, do we break pass 5,300 or is a breach below 5,000 Nifty more likely?

A: It is hard to give a particular range but it looks unlikely that we are basically going to pass 5,300 in a hurry. The reality is that the last time we reached 5,300, issues about sovereign defaults and the Greece impacts etc brought the market down to below 5,000 and the anxiety over the Budget also probably brought the markets down below 5,000. As we speak today I don't think any of these kinds of apprehensions or anxieties are still there. By and large the Greece episode is factored in, the Budget has been relatively benign against expectations. So it is very much likely that we are probably getting into an environment where this market will continue to play in a range. Maybe that range is more like 4,800-4,900 on the lower side and maybe 5,300 on the upper side.

It is quite possible that if the earnings environment gets better then that is the important trigger which could drive us outside of 5,300. But we have to keep in mind that there are several headwinds which have also cropped up in terms of higher interest rates, higher raw material prices, higher inflation, higher issuances and all these are pretty strong headwinds, which I don't think can be surpassed in any kind of a hurry. So our broader sense is that this market will remain in a range which can get narrower before any substantial event unfolds.