Global factors hold key

The recovery in Indian markets from their recent low has been swift. Experts believe since valuations are fair at current levels and the near-term earnings expectation isn't encouraging, further gains for the market will depend a lot on global growth and risk appetite. While the Indian market's underperformance could be a thing of the past, a consolidation seems more likely.

Christopher Wood, Managing Director, CLSA
''More foreign selling cannot be ruled out, given the continuing overweight stance and our base case of renewed risk aversion globally, sooner or later. It is also the case that there continues to be a lack of evidence of renewed cyclical momentum in India, with credit growth still only slightly above nominal GDP growth''
Source: Greed & Fear newsletter

Sunil Singhania, CIO, Reliance Mutual Fund
''The market might consolidate at current levels before gaining further. The March quarter earnings aren't expected to be good, so it is unlikely that the market will go up one-way from here. However, things look better than before''

Gautam Chhaochharia, Head of India Research at UBS
''The Indian market will be driven by what happens to global markets and risk appetite. Indian markets are trading at fair valuations and it is difficult to get attractive returns over the next six months, unless the global environment turns supportive. While the long-term growth story is intact, the near-term growth environment looks sluggish. The upside scenario is 8,400 on the Nifty''

Dharmesh Mehta, MD & CEO, Axis Capital
''Indian markets will continue to be guided by what is happening on the global front. However, given the stability in the rupee or recovery in the bond markets, the recent undperformance of the Indian
market might end''