Budget Expectations: CRR cut likely, but Budget unknown animal, says PN Vijay

PN Vijay, Portfolio Manager at pnvijay.com spoke to CNBC-TV18 about where the markets are likely to trend going ahead and what the effect of the Assembly Election results, the impending Budget and the credit policy meet are going to be.

Below is the edited transcript of his comments. Also watch the accompanying video. Q: What is the political situation after the election results, and how supportive or hostile is it from the markets perspective over the next few weeks?
A: I think the political situation is coming down. There was some talk of realignment of forces etc immediately after the SP victory, but the cold logic has come into play over Holi because the non-Congress-non-BJP stacks up to about 175-180 odd seats. They are short by about 90, and within that 180, you have got Shiv Sena and Akalis, who will never support the so-called secular forces. So it is impossible for this motley crowd to do much than make noise, and I cannot imagine the communists supporting a government led by Mamata Banerjee. It is the contradictions in Indian politics that keeps the Congress going and these contradictions are very real and the arithmetic of that is very real. So I think political instability as a factor is the bogie that comes up every now and then, when there is a good rally, and people need a reason to sell. So nobody gives it much of a chance or time here.
Given that, I think it is very difficult to say how the credit policy and Budget will pan out. My own sense is that the credit policy will be very favourable in a sense that there surely can be a CRR cut. There maybe a rate cut also because the global trend seems to be clearly