Dec 21, 2012, 06.18 PM IST | Source: CNBC-TV18

See mkt at 6100-6300 by Feb, if US fixes fiscal cliff:IL&FS

Vibhav Kapoor, IL&FS, says that the Nifty may touch 6100-6300 by February if the US fiscal cliff issue is resolved. He also says that all global markets will be adversely affected if fiscal issue does not end on a positive note. The future market movement is solely dependent on fiscal cliff issue.

Vibhav Kapoor, IL&FS, says that the Nifty may touch 6100-6300 by February if the US fiscal cliff issue is resolved. He also says that all global markets will be adversely affected if fiscal issue does not end on a positive note. The future market movement is solely dependent on fiscal cliff issue.

Also read: See Santa Claus rally in January this time: PN Vijay

Below is the edited transcript of his interview to CNBC-TV18.

Q: Does it look like there could be a year-end correction or you would not bet on that right now?

A: The US fiscal cliff is one single factor which will decide the market movement not only for the year end but for next few months. It will also decide if the uptrend will continue or the market will move into corrective mode.

Q: How badly would India be affected by both the uncertainty and the outcome? Up until now performances have been disparate across markets despite this fiscal cliff issue.

A: If the fiscal cliff issue actually boils over completely and turns completely negative then it will have an adverse impact on all global markets including India. India may see little impact because probably commodity and oil prices will come down, but the sentiment will turn sour across the world because at this current juncture when the global economy is just coming out of a very slow growth, if the US sees a figure of minus 2 percent for the next six-nine months, then it will have a negative impact on all markets.

Q: What probability would you set for the Nifty to get back to 6300 top buy between now and the Union Budget?

A: Our target is 6100-6300 by around February. The chances still look very bright, but it is subject to development in the US. If the US economy sees negative growth rate due to fiscal cliff then the chances of 6100-6300 would diminish considerably.

Q: Where would it set downside risk at for the market?

A: Right now we are looking at 5700-5750. One needs to reassess their position if the outcome turns negative. It is too early to comment about the outcome.

Q: Do you think is there any local development which will be significant over the next 20 days or do you think the local news flow is over for now?

A: I think the local news flow is over. Result seasons in mid-January and next RBI policy will be the event that needs to be closely watched.

Q: What do you reckon? How do you think some of these high-beta spaces like real estate and infrastructure may move over the next couple of weeks?

A: The infrastructure space and the real estate space have not really done all that well, they have underperformed, although they have gone up in the last rally. So I think there is still sometime for them. For a lot of these sectors, it depends on how interest rates move in the domestic economy going forward and with the RBI not cutting rates in December; I think that has got postponed a little bit.

These sectors will only start to really perform well when there are clear indications that the interest rate cycle is really going to come down by at least a 100 basis points.

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