Expect markets to remain in a trading range for the short term: Rajat Rajgariha

In a chat with ET Now, Rajat Rajgarhia, Director- Research, Motilal Oswal Securities shares his view on markets:

ET Now: Do you think some degree of complacency also has set in for local and global markets? Two months ago it was all about rupee, Syria, tapering, poor macro, bad numbers. Suddenly, nobody is talking about macro, poor earnings, GDP forecast, earning estimates, everything is on a backburner.

Rajat Rajgarhia: We live in an era now where volatility is not just high for equity markets, they are equally high for bond markets, currency markets, commodities and even the way the policymakers approach now various parameters.

We were 5400-5500 just in the last week of August, early September. We are back to 6000 now. More important point here is that it is becoming increasingly difficult to pan out what should be the normalised growth rate now.

The developments in US over the last two weeks itself has created another set of volatility into the global markets. So the markets will remain in this range but as we saw 2012 when the markets remained in the range of 4800 to 5400, in 2013, that range got shifted up by about 10%, from 5400 to 6000.

For the first five months of 2014 till the time you do not see the general election results, the markets may again shift the base up by about 300-400 basis points. That is nothing to do with any re-rating but just that that 7-8% earnings growth that you are seeing in, the market is just getting adjusted to that growth.