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Last Updated : Jan 08, 2015 04:25 PM IST | Source: CNBC-TV18

Mkt sentiments improving; Nifty@10k in 12 mths: Crossbridge

Despite recent volatility, the market sentiment has improved since the start of the year, says Manish Singh, Strategist & Head-Investments, Crossbridge Capital LLP.

Despite recent volatility, the market sentiment has improved since the start of the year, says Manish Singh, Strategist & Head-Investments, Crossbridge Capital LLP.

Though he feels that emerging markets may have some volatile times ahead but if one looks at a timeframe of 6-12 months, he can really average out his trade.

Maintaining a buy on India, he expects Nifty to touch 10,000 in the next 12 months. However, he does not see the index hitting 9000 in pre-Budget excitement.

Below is the transcript of Manish Singh‘s interview with Ekta Batra and Nigel D’Souza on CNBC-TV18.


Ekta: It must be a very tense time for everybody because of what took place in France yesterday but can you just tell us what the status of the equity markets are in Europe today?

A: I would say that yesterday we had Federal Open Market Committee (FOMC) minutes which was not a big surprise because the view is still very firm that any USA interest rate increase is going to be only for second half of the year. We had a very encouraging jobs report in USA which is again a positive. We had a bad inflation number in Europe which just means that quantitative easing (QE) coming from European Central Bank (ECB) is more likely and you may get that announcement when ECB meets on January 22. So I would say that if you go with this thing that bad news is good news and in Europe that is clearly case. Bad news on inflation is good news for ECB to do QE and therefore you have seen the market supported also oil is something that everyone is looking carefully. We saw slight bounce in oil so we might be getting where we are hitting a bottom on oil and which will be positive news in the sense that it will take some volatility away. So, we have to wait and see but the sentiments are getting slightly more positive than it was at the start of the year.

Nigel: In terms of emerging basket, what’s going on there because India has seen quite a volatile session in the last four-five sessions, China has been an outperformer. Today it was down 2.5 percent when the global markets are running away. What’s your take on emerging markets?

A: In my newsletter toward the end of the month last year I wrote to my clients that I do see some sort of a correction in the emerging market just on the back of dollar strength story and the European QE story which was dragging out. We have seen 4.5 percent correction in Nifty from 8,400 to low of 8,000. My view is that emerging markets are going to be having some volatile time at this time at the beginning of the year but if you are looking at a 6 month to 12 month basis then this is the time to really average out your trades. If you got in at 8,400 then you should still buy at 8,100. To me 8,000 is pretty much on Nifty where buyer should pile in and buy more and more of the emerging markets especially India I would say because India’s positive reform story is still in place, everything that is coming from oil price is still in place, you do not see a quick bounce in oil price but the view is still very constructive but you will have to take the volatility and that’s exactly what we are seeing in the emerging market.

Ekta: For the Indian market as a whole, you spoke about levels for Nifty. Do you think 9,000 is feasible or something that we could see for the Nifty around the Budget, pre-Budget, post Budget?

A: I doubt so because the reason is that the Budget is going to be -- and on the contrary you might see some negative reactions as well because the sentiment is still very positive. It depends on how much the Finance Minister is going to announce and assure the market and people who might be having a very high expectation may again get disappointed, so you might see some weakness and I would use that weakness to buy because the global story is very positive. In US you have seen good jobs report in terms of Automatic Data Processing (ADP) number yesterday and we will have the non-farm payroll on Friday and it’s not if but ECB is going to do a QE in Europe so that should lift sentiment and Japan will continue to do easing as they are doing and China is also rumoured to be doing another round of stimulus or big number. Therefore, if you look at 6-12 months story, Nifty should be around 10,000. So you have to average out and buy even if you get disappointment around Budget time but I do not see 9000 in pre Budget excitement.

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First Published on Jan 8, 2015 04:21 pm
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