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RBI policy next trigger, LT to lead mkt move: Sabharwal

The market scenario is likely to turn more benign over the next few months, said Sandip Sabharwal of asksandipsabharwal.com.

The market scenario is likely to turn more benign over the next few months, said Sandip Sabharwal of asksandipsabharwal.com. “Three months ago we were looking at several global concerns like the possibility of an early rate hike by the US Federal Reserve, Greek Crisis which would become uncontrollable and several others. However, last week we saw some positive developments, which would play out over the next few months,” he said.

He feels the Iran situation is very positive from India’s perspective — both in terms of keeping crude prices down and opening up of the export market for India. For the immediate short term, Sabharwal sees the RBI policy slated Tuesday to play an important role.

“The markets have bounced back from the bottoms and the rate cuts have not percolated down to the economy. So all eyes would be on the RBI and the likely steps it may take to further boost the liquidity,” he said. However in case there is no action tomorrow, he thinks the markets can sell off a bit more.

At the beginning of the year my guess was that the first few months would be tough. Thus the first quarter saw 2 percent gains. The outlook for the second half from the economic growth perspective looks more benign and positive, Sabharwal said.

He expects companies like Larsen & Toubro  (L&T) to take the lead in the next market move as the infrastructure segment is coming back now. “Post spectrum auctions, even telecom stocks look well-placed as there is reasonable consolidation. I expect the segment to be an outperformer,” he said.

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