Markets may eventually head for higher levels: Raamdeo Agrawal, Motilal Oswal Financial Services

 The correction in the Indian markets for the time being are probably over, as the New Government takes charge in Uttar Pradesh. Congress President Ms.Sonia Gandhi has come out in the media and have spoken at length about solving the problems of National Interest, through dialogues and amicably with the opposition and allies. This gives much hope to the FDI in retail bill. Meanwhile, Nifty is now at 5221 and probably moving towards 5300 mark (Spot Nifty). Traders are suggested to close all their shorts. Buy Banks (Positional buy OSITIONAL BUY IFCI Ltd at Rs.41-43.5, T--Rs.47.5-51, SL--Rs.39 and Central Bank at Rs.98-99)), Real Estate (D B Realty Ltd at Rs.72), ADA Group Stocks (Reliance Media at Rs.87-88), Construction Counters (IVRCL at Rs.50-51), Railway Counters (Kalindi Rail Nirman at Rs.110 and Kernex Micro at Rs.84--85) and Jai Balaji Industries Ltd at Rs.39-40.

In an interview with ET Now, Raamdeo Agrawal, Joint MD, Motilal Oswal Financial Services, talks about his road show as well as the market. Excerpts:
ET Now: How was your road show and what are the kind of feelers you got from some of the top global clients?
Raamdeo Agrawal: The trip was good and all the global investors there are very keen to see what happens in the next 15-20 days in India, but they are very clear about this fact that India participated in the global rally and we got as much money as most of the other markets got. So, seeing the kind of excitement there it can well be said that the recent India rally has had global implications.
ET Now: Post the UP verdict, markets are of the view that reforms will take a backseat and it will be next to impossible to implement things like FDI in retail as well as GST. What is it that you are pricing in ?
Raamdeo Agrawal: I do not know how the markets will take it or will there be any impact or not, but UP is a very large constituency. I believe it has about 20-22 crore population. So, it is almost close to 20% of the country in terms of humanity. It was a very important election and people have voted very clearly. So, at least there is no coalition politics, there is no hung assembly out there and there are lots of promises about developmental politics.
They will do a lot of development and Akhilesh has gone on record saying that he will repeat the Bihar story in UP. So the opportunity is very large. It is a good time for the country that one of the very large spaces, which was out of the development mode, comes into development.
So it is good for the nation. I would think that everywhere, except Uttarakhand where this was very close win for BJP, the verdict is very very clear. So thanks to media, we have been able to get this kind of decisive mandate one way or the other. So it is a very very positive development.
ET Now: So one event is out of the way but 2 more are still left, credit policy and union budget 2012. So from a market perspective, which is a bigger event -- the credit policy or the union budget?
Raamdeo Agrawal: Budget is an annual affair and at times it is used, apart from presenting the expenditure and revenues of the government, to declare long-term policies also. So-called reforms are being rolled out, major pronouncements on GST and income tax and all. So, those things do come in along with the budget. It is being watched out. It is made out to be a very big event. If there is something in the budget, obviously it will become more important.
But credit policy is an ongoing affair. Every 1-1.5 months, you keep getting that and one of the important elements at least in my mind about the market is the interest rate. And we are almost at the peak of the interest rate cycle. I would think that at this juncture, probably credit policy is more important than what would happen in the budget.

Courtesy: The Economic Times