Earnings season is the next big trigger after Fed meet: Gaurav Mehta, Ambit Capital

Post the US Federal Reserve's widely expected decision to hike rates, markets will not see 'much of a negative reaction', says Gaurav Mehta, VP-Institutional Equties, Ambit Capital. In an interview to ET Now, he explains that the Fed event has already been factored in by markets and now, all focus will shift to the earnings season in January.

ET Now: How are you looking at the market post the Fed event? The consensus view really is that this rebound rally would extend out and perhaps we could look at levels of 8,000 and beyond again?

Gaurav Mehta: This is what you have seen so often get repeated in the past which is that around a key event, especially when the outcome is relatively certain, you see most of the portfolios getting realigned before the event, rather than wait for it. That is something that you have seen this time around as well.

In the run up to the event, the markets digested that piece of news. The domestic market saw close to $8-$9 billion of cumulative foreign institutional investors' (FII) outflows over the last six months. Protection and precautionary stance has already played itself out which is why you are seeing this little relief rally.

I do believe that you should not see much of a negative reaction post the event. But eventually all of this will last, perhaps, only for one or two weeks. After that, attention will be back on individual markets.

From that point of view, the earnings season that is set to start in the middle of January, will become all the more crucial. For domestic markets, the earnings season should be the next big trigger to watch out for.