See Nifty in 5700-6000 range, Ranbaxy relief positive: Vora

Indian market could remain volatile based on the movements in the currency market and Nifty could be rangebound between 5700 and 6000, says Amisha Vora, Joint Managing Director, Prabhudas Lilladher in an interview to CNBC-TV18.

The non-farm payroll data from the US is important because if it shows strengthening of the jobs market then it will give a lot of support to the argument that the tapering will be earlier than envisaged, which would be negative for high risk asset class or bond yields, she explains.  Moreover, Vora believes that more than Q1 earnings, market would get direction from broad numbers on CAD, gold imports, policy announcements etc. Also read: FII outflows not key worry; Sensex can hit 21700: Nomura Below is the verbatim transcript of her interview on CNBC-TV18 Q: We have seen a pullback in the markets in the last couple of days. Do you think this is just a momentary pullback in an otherwise down trending market or have we put in place some kind of a base for ourselves? A: We always thought the markets probably would remain a little range bound, so, I wouldn’t really qualify it as a down trending market or up trending. We thought 5700- 6000 would be the range although it did go below 5700. However, a couple of very positive decisions which were lingering for a long time got cleared. Although it might not have any immediate short-term impact in improving the business on ground, but in the medium-term it will have extremely positive impact on the economy and growth.  So, that was the only positive outcome of this entire global turmoil that we saw which lasted for a while, but gave shockwaves in our markets and debt markets. Q: How critical do you think the non-farm payrolls data from US will be in terms of a movement for the Indian markets and especially for the currency and the bond markets? A: It will be important although I don’t how critically important it is for Indian markets but if the job markets continue to strengthen then it will definitely give lot of support to the argument that the tapering will be earlier than what was envisaged before. Which would mean negative fallout, for any high risk asset class or bond yields. Having said that as far as India is concerned, over dependence on foreign flows because of our current account deficit (CAD) continues to be an underlying fact. Also, till the time we see a smoothening or softening currency markets the rest of the markets will continue to behave little volatile based on how the currency behaves. Q: You track Ranbaxy, how have you read all the newsflow and at least the interim relief that we are getting in terms of the USFDA perhaps not looking at inspecting the other facility like Mohali? A: This clarification on Mohali is very important. Though our discussion with company did reveal that they have not seen any such information from USFDA but a clarification to markets in general is very positive because Lipitor is also being sent from here, and some of the other important products which are their first to file like Diovan also would not get now impacted because there is clarity that Mohali works as it is. And Dewas and Paonta Sahib will continue to be under vigilance or inspection. I think it is absolutely status quo and there is no negative development, though the stock price has reacted extremely negatively in last 1-1.5 months due to lot of media and news reports but to me it suggests that there is absolutely no negative development. In case as what we have been expecting for a very long time Diovan to be launched which is one of their exclusivity product which has got delayed substantially. In case that comes that would be even further positive because one is expecting more than USD 500 million kind of contribution from that product. Q: July is going to be quite an important month in terms of earnings kicking off, we have the policy at the end of the month as well. In terms of key determinant or trigger for the markets going forward what would you most keenly be watching out for? A: In terms of expectations from earnings there is hardly any. Also to some extent market is expecting that there will be some good amount of mark to market or reported profit after tax (PAT) will be even lower than the actual numbers. Results will be nothing much to talk about across sectors largely, although there would be some exceptions which are linked to monsoon and some exceptions which are positively benefited out of currency trend. However, we think that it will be still the broad numbers on CAD, gold imports, policy announcement and speed at which some of the large infrastructure projects which are stuck get solved. these would be the ones which will keep deciding the direction of the market. For next couple of quarters I believe that the ground reality will continue to be very challenging for businesses and as we can probably keep seeing from auto numbers, cement numbers, steel numbers the volume growth continues to remain very muted or impacted and that will take time before it reverses. So, the focus of the market will continue to be some of the global events and the policy announcements.