Sensex rally is not fundamentally sustainable: Julius Baer

There have been lots of events that have transpired across the global markets, the main being some relief in terms of Greece and the end of QE2, which is around the corner. Due to this, markets world over have rallied into the green. 

But Anantha Nageswaran, Senior Economic Advisor at Julius Baer believes that these global conditions are unlikely to sustain. "The rally of almost 1,300 points in Sensex over the last three-four days has very little fundamental to back it up. So I doubt this is sustainable," he tells CNBC-TV 18. He goes on to add that the boost in markets is a part of a global risk asset rally. Below is a verbatim transcript of his interview with Sonia Shenoy and Reema Tendulkar. Also watch the accompanying video. Q: After all the news flow that we have seen in the past week, what have you made and how do you think global markets will react in the times to come?
A: I guess the global markets reaction in the last two-three days tells you that they think the problem of Greek debt has been solved and I personally believe that that is a wrong conclusion to arrive at. While the relief rally was somehow not so surprising given the oversold conditions, I suspect that it is unlikely to be sustained. Yes, news such as the release of crude oil, etc tries to bring down the commodity price, inflation threat and therefore puts a bid under the risk assets. But I doubt if these conditions are sustainable. Q: The second round of QE comes to an end this month. Going forward, there is concern about what happens with liquidity. Our own markets have seen this dramatic pullback from the lows. Specifically for the Indian markets, you think this liquidity issue will come back and become a concern or do we have a trajectory of our own?
A: I think we will have trajectory of our own, as well as being a victim or function of global trends as well. I think both will be happening in the case of India. But I think India can potentially defy the global risk aversion even if it happens or at least mute it. As the Prime Minister