See Nifty between 5600-6200 for next few months: Vora

Indian equities got trashed on Wednesday, with the Sensex falling 202 points and the Nifty falling 63 points. Reserve Bank of India's policy next week is likely to be the biggest market trigger. After the retail inflation inching 10.91 percent, market experts feel that RBI is unlikely to cut rates, causing the market to bleed.

Amisha Vora of  Prabhudas Lilladher told CNBC-TV18 that Nifty is likely to be in the range of 5600 to 6200 for the next couple of months. Talking about the expectations form the RBI policy next week, Vora expects a 25 basis point (bps) reduction.

Below is the verbatim transcript of Amisha Vora's interview on CNBC-TV18

Q: What would you attribute the sudden weakness because last week we had a closing at nearly 5950. What would you attribute to the weakness that we are seeing this week?

A: Couple of things. Though the consumer price inflation (CPI) numbers were expected not to give in, it has added worry both on the bond markets and expected Reserve Bank of India (RBI) move. That is to some extent hurting and delaying the whole process of recovering. Gradually, it has also been whether it is cement numbers or car numbers - they all were slowing down which was further compounded because of the cut in the planned expenditure that is happening to achieve the deficit targets. But that compounded with slightly renewed worry on Coalgate.

In case of further delays, the private investments, together, to some extent it is domestic, it is causing worries and partially it is regional with Chinese inflation also being high. So as a combination, we are a little jittery and it so appears that in the broader range of 5600 to 6200, market will continue to be in that for a couple of more months.

Q: Does this market have the potential to move to the upper end of the range at about 6100-6200 or do you think that the headwinds that you alluded to, would restrict that upmove?

A: Over the next couple of months, not only small move by RBI that a 25 bps market has discounted, but beyond that a lot of cutting has happened and will continue till March because of these planned cuts by central government on the Budget. Post that as they resume that, April to June may look slightly better and things would start looking as if they are bottoming out. So over next three-four months, I still believe that this broad range should hold true. There is a possibility.

Q: The banks have been under tremendous pressure in the past two trading sessions at least and there was news that Punjab discom is pulling out in terms of the restructuring package. What do you think of the medium term on asset quality with regards to banks especially going to pass the Q4 earnings?

A: SEB could be one of the reasons, but they have just raised a couple of issues and some resolution on those issues in the agreement may resolve that. Some of the other SEBs are still signing the entire restructuring package and the conditions. The broader trend in terms of the key risks would continue to be the entire pack of infrastructure.

Whether they pull on any further from here without restructuring their books is a big risk and overall administrative recovery though some policy related recoveries happening is getting delayed. This entire pack is under tremendous stress. They might cause a little trouble or large problems on the restructuring side and that is my fear.

Q: Tomorrow we have the all important inflation numbers coming out. It is expected to be a flattish trajectory this time around. What is your expectation and how do you think it will move the needle of the market tomorrow?

A: In terms of wholesale price index (WPI), it should be in the expected territory or slightly lower. Looking at the way things have panned out in terms of cements, steel prices except of course diesel but most of the things have been pretty sober, except food that CPI is capturing and giving enough indications. Inflation should not cause any undue negative surprises for the markets. Crucial will continue to be RBI move where we expect about 25 bps reduction.