See near-term resistance for Nifty at 5300: Religare Cap

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS Tata MF, Angel Broking stock/sector portfolio must-haves Nifty upside capped at 5200-5250: Sharekhan Markets to be range-bound in 2010: BoA ML ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 24/05/12 Are Mutual Funds betting on Nifty?

In an exclusive interview with CNBC-TV18, Vipul Sanghvi, President - Institutional Sales, Religare Capital Markets, speaks about the markets and gives his outlook going forward.

Here is a verbatim transcript of the exclusive interview with Vipul Sanghvi on CNBC-TV18. Also watch the accompanying video.

Q: We have seen over last couple of days just a bit of consolidation in the markets seen in the retail and HNI interest taking the smallcap and midcaps quite high, what is your sense as we stand at 5100? Are we going towards those January highs because there is a bit of near consensus about that?

A: I think post Budget rally is kind of consolidating and it might consolidate for few more days before actually breaking out on the higher side. Our biased remains that earnings growth will be the prime driver as far as Indian equity markets are concerned. As we enter into second week of April that news flow should act as a trigger for an upward breakout in the market.

Q: What would you say about the Nifty itself? Do you think that in the next six months you are going to see a breakout at the upper end? We are not been able to get to that 5250 with much conviction?

A: Let us look at that in perspective, basically if you look at last one year return, we are in excess of 90% for Nifty and closer to that for Sensex also, so we have come a long way since last March sometime around this time. So consolidating and creating a firm base will be more important for the market. That is what I think market seem to be doing at this point in time.

Second factor, if you look at once again, we have started seeing good amount of inflows from foreign portfolio investor and that itself is giving good indication that going ahead also in 2010, I think inflows are going to remain positive.

Q: If you can tell us levels and maybe time periods, are you expecting an upside breakout in the next quarter or do you think that it will be range trading in the near-term and any breakout could come maybe in late 2010 as some people have been telling us?

A: Near-term is anybody's guess. I would say 5,300 odd levels could act as a near-term resistance for the market and the crucial test for the market at that point. On the lower side, I do not think 4,700 should be broken in the near-term.

But if you have to take a one year view from here and if I have to factor in FY12 earnings one year hence, I think somewhere closer to 5,800 or say 6,000 looks like a logical level as far as Nifty is concerned.

Q: Has Tata Motors done its course at Rs 800 or so or do you think it could be for more and could even surprise on the positive side?

A: I would say that as far as commercial vehicles entire pack is concerned, the recovery in volumes is more secular, so it should continue with economic expansion. For Tata Motors in particular they have highest operating leverage with commercial vehicles recovery. I think there is more room before the rally fades out.