Tuesday 'day of reckoning' for current rally: Udayan

Suggesting that the stock market has fully priced in a 25 basis points cut from the Reserve Bank of India, when it meets tomorrow, and could perhaps even correct if it comes through, senior journalist Udayan Mujherjee believes that equities will need a 50 points cut to keep their momentum going.

The CNBC-TV18 consulting editor told Sonia Shenoy and Latha Venkatesh in an interview that part of the recent bounce-back from 8,000 Nifty appeared technical in nature rather than backed by fundamentals.

“Fundamentals do not justify a move beyond 8,500-8,550. The market is ahead of itself given the earnings picture and the macro backdrop,” he said.

In the absence of earnings, “a 17-18 PE market cannot sustain its upturn ad infinitum without earnings catching up,” he said. “And nothing in the management commentary or key metrics suggests an earnings recovery in the next few quarters is a done deal.”