However, from a near-term perspective, Gaurav Dua, head of research at Sharekhan believes that the Nifty is likely to consolidate between the levels of 5700 to 6100 till RBI policy review meet.
Smartinvestor : It has been a positive start to the day with the Nifty regaining 5900 levels. Do you see the momemtum continuing? What is your advice to the investors at the current levels?
Gaurav Dua : See our broad view is that the Nifty is likely to consolidate between the levels of 5700 to 6100 till RBI policy review meet. A positive surprise of policy rates cuts of higher than 25 bps could help the markets break through the higher end of the range. Or else we would continue to spend more time here.
Gaurav Dua : On a slightly longer term, we are constructive on equities for the next 12 month period and beleive that the Nifty could give returns of 10-12% in FY14 which would be in line with the growth in corporate earnings. So our advice is to accumulate quality stocks around lower level of trading range; we are structurally bullish on banks, oil&gas and certain section of consumer businesses
Smartinvestor : Do you think that the worst is behind as regards the corporate earnings?
Gaurav Dua : We could see another weak quarter in terms of Q$ earnings but the corprate earning growth is expected to improve in FY2014 in line with cyclical upturn on India and global economy
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