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Market may rally 5-7% if EU summit delivers: Nitin Rakesh Watch Video
27 Jun 2012, 09:31 AM
As not much is expected from the European Union summit, it will instill confidence in the market if it manages to deliver. The summit is expected to result in a stimulus package of some 130 billion euros in infrastructure bonds, regional aid funds and European Investment Bank loans.

Amidst low hopes, Nitin Rakesh MD & CEO, Motilal Oswal AMC is a bit optimistic that Indian market may rally 5-7% if EU summit delivers. He feels that that probably there is some level of support coming in from global macro with crude falling like ninepins.

"Despite all the negative news flow, from across the world overnight Monday, we did pretty well yesterday. I think it seems like that the market is refusing to actually fall below 5100-5050 mark. So thats clearly one good sign. Maybe we are seeing valuation support," he adds in an interview to CNBC-TV18.

Rakesh is hoping for a 15% YoY earnings growth in the first quarter of FY13.

Also read: Manmohan takes over FinMin; will market see another 1991?

However, there are some concerns that are keeping foreign investors away from India. He points that among the emerging markets, India is the least preferred one due to the policy inaction by the government.

"Even if EMs come back into flavor I think we will have to actually have to compete very, very strongly for capital based on where we can differentiate ourselves, where we can make a difference from the point of view of giving that confidence to people that this really indeed is a growing emerging market," he reiterates.

Below is an edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: Are we going to see this range bound situation continuing for a while or do you think the triggers in July could lift the market into a higher range?

A: I think the market is in a fairly lackluster phase right now. There is so much news flow from outside of India, there is lot of news flow from Delhi and
 
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