Step on reforms, retail action key to mkt mood: Edelweiss

Vikas Khemani of Edelweiss Securities explains to CNBC-TV18 that continued government momentum on reforms and retail participation is  key to maintaining and boosting market sentiment.

Also Read: Expect H2 GDP growth to be better than 5.4% in H1: Montek Also Read: Brace for 21000, don't wait for correction: Ramesh Damani Below is an edited transcript of the analysis on CNCB-TV18. Q: From levels of over-5,900 where do you see the Nifty and how do you see it progress?
A: I think markets have rallied as after almost a year-and-a-half of paralysis, the government is moving in the right direction. However, at the ground level, the pace of economic activity is yet to pick up.
So I feel that, overall, markets are right now in a positive trajectory and the momentum will continue till the time government is active and driving the growth agenda. This positive sentiment will continue at least till middle of 2013 and we will have to see what kind of policy government adopts, before going into elections that will impact the rest of the year. Q: What would you suggest buying? Do you suggest PSU-bank and power stocks where growth is expected or should investors adopt a micro, bottom-up approach? Which is the better approach?
A: That is an endless debate. A combination of both is always employed for better results.  By and large, I am quite bullish on the markets from a macro perspective and will pick individual stocks depending on my risk appetite. Q: Are foreign investors are looking to allocate far more funds than usual in the Indian market? Can we expect much higher FII inflows in the cash markets?
A: Absolutely. Incrementally, in the last one-and-a-half months, the interest in margins has returned. Investors on the sidelines are beginning to evaluate India all over again. So in my opinion, the next calendar year will witness reasonably good amount of inflows. I am particularly very positive about the first half. If retail participation begins, I think it will immensely add to the sentiment.