Mkt to pause for 1 wk but to hit 5400 by yr-end:Quantum Sec

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The session won't be quiet forever. Eventually there will be a breakout or breakdown. Which way will that be? Sanjay Dutt of Quantum Securities gives his perspective.

He feels that the global markets are going up on liquidity flows. He also believes that the fundamentals in Asia are beginning to improve. "The markets would pause for maximum one week," he says, adding that the Nifty can go up to 5,300-5,400 by year-end and it is unlikely to break below 4,500 levels. He remains on the long side in the market and says he would book profits if the Nifty goes to 5,300-5,400 levels.

Positive on oil and gas stocks, Dutt says, the sector needs to move for more Nifty upside. He is also bullish on select FMCG stocks and the commercial real estate space. He believes that the rupee rate will play spoil sport for IT in the near-term. He further adds that he would move positions form gold to silver.

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

Q: Since we last spoke a lot has happen. We went to 4,500 nearly and we have come back to 5,000. What next reckon by the time the year is out?

A: It reminds me of an interesting quote which I read about three days back. This was made by Charles 'Chuck' Prince, Former Chairman and Global CEO of Citibank in July 2007. He says, "As long as the liquidity is on, we are going to get up and dance and when it stops things are going to get pretty complicated." That's exactly what we are seeing the world over. That's why we see the markets moving in unison because there is no logic or there is no reason why Asia should be connected with West because things in West still are very bad at this point of time in terms of fundamentals as well as the employment rate or the housing data etc, that's been coming.

We are still standing in the West on struts. The struts are obviously the liquidity and the policy action that is been taken up by central bankers the world over whereas fundamentally Asia is starting to improve particularly countries like India. So what the markets are playing right now - what the markets are indicating is very clear. IT that the quant funds that are playing the games right now otherwise none of us can explain the reason why suddenly in eight trading sessions we dropped down to about 4,500 from 5,200 and we are back up to about 5,100 again. Whereas I do not think anything has changed fundamentally over the last three to six weeks in India.

Things are carrying on; the quarter numbers have been okay but nothing to write home about - it could have been better. I think it's a liquidity that's playing out - whether you call it the carry trade or whether you call it the short dollar trade and the long precious metal trade whichever way. but it's basically the quant that are in action at this point of time.          

Q: So what looks more likely in the near-term - an extension of this dull phase we have had for a couple of days or more likely a move up for the market?

A: We are pausing right now for a day or two or maybe maximum of week or so and I am quite convinced that we have just got about 30 odd trading sessions - in fact got 30 credit session left in this calendar year - I think we will make a new high in this calendar year itself - a new 52 week high and probably we might be headed up to about 5,300-5,400.

We must keep into account that some key events were there in place. We have got record date coming off the largest component of the indices that's Reliance on November 27. So that adjustment will take place and that adjustment will have a bearing on the indices. Similarly, we have got lot of other events that are playing out around the oil and gas space. We have the Parliament session starting on Thursday. Some noises will come out of that place which we may not like, we may like. So some amount of volatility is there but I am betting on the long side definitely.

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