'Lack of earnings growth, high valuation are biggest challenges for market'

In medium-term, trajectory of interest rate will depend on the trend of inflation, oil prices and global bond yield, says Satish Menon, executive director, Geojit Financial Services

The Reserve Bank of India (RBI) surprised the markets with a hike in repo rate. SATISH MENON, executive director, Geojit Financial Services tells Debashish Pachal that he has a one-year target of 10,400 for the Nifty50 index. Consumption related stocks should do well going ahead, he says. Edited excerpts:

How should investors play the interest rate sensitive stocks in the backdrop of RBI’s rate hike?

Market was hoping for a status quo with a hawkish view. In the short-term, we expect some respite in the bond and equity markets, which will be positive for rate sensitive stocks. In the medium-term,