Indian small-cap & mid-cap have great future: Bobby Rakhit

US stocks advanced on Friday and posted their best weekly gains in a month as stronger-than-expected earnings from Amazon.com

Bobby Rakhit, CEO, Inside Consulting, in an interview to CNBC-TV18, talks about the global market condition. "We are seeing a little bit of weakness in job data and that data next week is going to be very vital," he explains.
As far as India is concerned, Rakhit believes that the midcap and small cap space is going to do very well in the long-term. Below is the edited transcript of his interview with CNBC-TV18. Also watch the accompanying video. Q: Things look alright for the US markets. The S&P is back above that 1400 mark, what is it that is driving the US markets and how high is the probability of QE3 now?
A: If you look at the US markets in general the reason why they are up is because some of the earnings have been fantastic. Three quarters of the earnings results have been positive and the real key next week is going to be all the data pouring towards the job data. Where the job data is going to end up is probably going to have a direct impact in terms of where the numbers are going for the next quarter.
Where do I think things are going? It is really a murky picture right now. I am bit more on the negative side, particularly on how GDP numbers are going down. We are seeing a little bit of weakness in job data and that data next week is going to be very vital. Q: Which way do you think the wind is blowing for the Indian markets? How are you positioned with respect to India now?
A: India is a very particular market in my sense. It has taken a bit of hammering because for a while FDI flows have been swinging in and out due to other issues in Europe. In the long-term, it is a fantastic market, particularly the midcap and small cap in India are going to do very well.
In the near-term because of all this uncertainty in the market that is built in, I think the India markets are going to flounder a bit along with the global markets.
But, commodities are a safe haven and are going to do very well in the second half of this year. That is where India is going to be in the short-term but, fundamentally it is still a great economy in the long-term. Definitely the midcaps and smallcaps are going to benefit. Q: How do you see Europe currently and do you see things like Spain etc. will flair up problems over there and create a risk off trade?
A: Spain is one of those economies where we are seeing a lot of bad data coming out of the markets. The unemployment rates are hovering around 18-19%. It really worries me and where this austerity plan in Europe is supposed to take place, can it really take place with those kind of unemployment numbers.
If you look at the next three months, the critical thing is going to be Italy and I am looking at Italy very closely, particularly the Europe spreads. Is Spain going to be a problem? Of course it is going to be a problem with numbers like this and the debt swaps and other things like this happening in Greece.
But, I think people have to look at higher economies particularly Italy, Germany and England. I think England will be interesting to look at.