Here is a verbatim transcript of Udayan's comments on CNBC TV18. Also see the accompanying video.

It’s not a done deal yet; it’s not in the bag but it looks like a very distinct advantage for Barack Obama and things will really have to go haywire for him to lose from here on. Still about 63 votes to get to get to the 270 mark but a very big lead from the announced results already, 207 to Obama, 135 to McCain. Perhaps, the reason why the US markets were up so much yesterday and the reason why whole of Asia is up today and one will have to see what India makes of it after six days of a rally which has taken us up 40% from the lows.

The rally that began yesterday will not fizzle out soon as was expected earlier. So, earlier expectations that the Nifty would probably find a lot of resistance and fail to climb above that zone of 3,000-3,200 probably is not going to come through and the market will move ahead of those kind of level. Thus, where it will stop is a moot point. There is good market sentiment around the world.

Asian Indices:

Asia is pretty smart this morning as you would expect as there is a big global relief sentiment which is swirling around. So rallies extent 3-5% across markets and the SGX Nifty is pointing out that we will fall in line as well with a 4-5% rally which should take us closer to 3,300 Nifty.

A word on the global setup this morning- There has been a lot of talk about policy and action from Obama but is it more about event relief for most market?

Yes and about sentiment, I imagine and justifiably so. People expect that there might be a change in the strategy, a new team takeover, looks at the crises with fresh eyes in the US and tries to put a plan in place often when a new team comes into place there is a new amount of energy which is unleashed and you need probably a new set of people at the helm of affairs there to take stock of the situation and try and put more crises management tools into place.

That is the market’s expectation that you will have a new and dynamic Treasury Secretary there, Obama will look at the problem with new eyes and try and get some more policy measures going. Whether they all pan out materially as the market is expecting and to what extent the rot in the US economic system and in the global economic system can be stemmed by a man or a set of policy measures is up for debate. But for the moment you would have expected to see that for sure, one relief move on the back of the hope and the expectation that a new team will try and fix things with more urgency than the previous team has managed to do and that is exactly what is playing out.

Its difficult to outline the contours of how much or to what extent this relief can play out because while the S&P may have rallied 20% from its lows, it is rallying from extremely beaten down levels and its entirely possible that it has a quite a bit more because you have just got into the last quarter of the year and if indeed the market is convinced that we put a low for 2008 by the end of October, then the relief rally which has been quite powerful already but it is still in terms of time in that got a couple o f months to go.

Let’s see where we end up with this of course the economic data is not looking good; the factory orders etc continue to point downwards. How much of it the market has priced in is the moot point.  We will follow the S&P and wherever it has to go in the pullback rally and on yesterday’s reckoning it seems like it’s not quite done yet.     

Nifty is done quite a bit by way of price but yesterday by the close the screen didn’t seem to look like it was in stall mode?

No, it wasn’t and I think the market players was quite savvy, they were playing for this kind of an outcome if  indeed this is a logical outcome of the lead, which Barack Obama has at this point because the lead has closed somewhat. But if indeed Obama goes on to win as seems likely now the market clearly sussed it out that it is pointless looking at Nifty levels and rather best to focus on the global news flow and to play for that and that is exactly what happened in the second half of trade yesterday. People figured out that it looks like there will not be any surprises in the US election results and if election results actually came in, the way the market was expecting, then it could lead to a 2-3 days more at least of good moves in the S&P and the Dow, which might lift global sentiment as well and then you would be probably able to cross that hump of 3,200-3,250 that people have been talking about quite easily.

So people held their longs yesterday and this morning they will be rewarded for it because it looks like the Nifty will start more than 3,250 or thereabouts. Yes, we are getting to the levels given 40-45% rally after this morning’s gap up, where you would want to be cautious but the consensus has been that Nifty will probably not make it above 3,000-3,200 and we are doing it now.

So may be that consensus will have to review its trading stance because the Nifty is going to places, where most people thought it would not go. Now where it ends in this pullback is difficult to call because it requires some global thinking as well, but it is entirely possible that this move takes you to 3,400-3,500 if the global rally continues. You could even get back to that level of 3,800 or 12,500 Sensex where we fell off from. I know that people did not account for this move itself taking it to those levels, but the market always surprise with the extent of moves, so this one also is in the realm of possibility.

On the internals and flows:

The flows are turning a bit sideways now. I think a large part of the short covering at least from the cash market seems to be getting finished because yesterday’s provisional figure was not that high. So you are probably getting to that stage where the most urgent people who had to cover up their shorts has probably done that and now the last bit of it is happening.

The DIIs (Domestic Institutional Investors) are also not in a terrible hurry to buy above 3,000-3,100 it seems. So now the crowd will get into the act.

If indeed this rally has a bit more to go then I think you will now see the retail HNI participation coming in - people who have not participated from 2,500 to 3,000 because of fear that the market would turn any day.

But as we enter the last lap of this pullback, if that indeed is the last lap, you will find retail participation coming in and that is pretty much what you are seeing now. If you look at the open interest addition in stock futures in stocks like IFCI, Ispat, Suzlon, RPL (Reliance Petroleum Ltd) typically the kind of stocks which retail HNI loves to slosh around in, there a lot of open interest is getting built up.

The midcap performance has improved considerably in the last two-three sessions. So you are probably seeing that the early part of the rally might have been driven by FII (Foreign Institutional Investor) short covering and some local insurance company buying. Now as the market has done 40% on the way up, now those guys are just getting easing off a bit and the retail HNI guys are coming in. So even from the options data, I think a lot of 2,800-2,900 puts have been written.

The general view is that the market will hold 2,800 to 3,000 kind of band on the way down even if it corrects and maybe probably has a short at more than 3,400 on the Nifty for the near-term. Let us see whether that pans out.