Nifty won't rally much, upside capped at 12% by Dec: RBS

Despite the robust rally on the street of late, RBS Asia Securities has brought down its year-end target for the Nifty by about 6%. Its executive director Parul J Saini expects Nifty to be at 5,800 (a 12% upside from current levels) by December.

However, he did say that valuations in India were now in line with historical averages. "The composition of flows is more skewed towards long only now," he pointed out. Being increasingly bullish on infrastructure and capital goods space, Saini picks PFC, IDFC and Canara Bank as his flavoured bets.
The Federal Open Market Committee meet that concludes today is expected to spring surprises. But, according to Saini, whatever the outcome it may not affect India significantly. "The impact of the FOMC decision on commodities too may be muted," he told CNBC-TV18 in an exclusive interview. Here is the edited transcript of his interview. Also watch the accompanying video. Q: Are we pushing against the higher end of the trading range now or is there substantial upside from this level of the Nifty over the next month or two?
A: It would be a little difficult to forecast what will happen over the next month or so. In June, we were bullish on Indian markets, especially relative to the region because we thought there was relative value.
Despite the rupee