'GDP growth will continue despite stimulus withdrawal'
Paras Adenwala says that the 7-7.5% growth in the GDP will continue even after a phased withdrawal of stimulus.
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| ET Now caught up with Paras Adenwala, MD & Principal Portfolio Manager, Capital Portfolio Advisors, to get his views on the market performance and the recently revealed IIP data.
What is the sense this morning in terms of the range that the index perhaps might trade in?
It all depends on the global markets. Considering there was a good amount of improvement in Dow after a weak opening on Friday, which augurs well for the markets. But, will the Greek proposal by the EU get through, will the budget be in tune with what people really expect, will the fiscal deficit be reined in? All these questions need to be answered, and therefore, taking a clear cut view on the markets for the next 15 to 20 days is a little difficult. I would rather bet my money on the markets post the budget.
We did exceptionally well on Thursday's trade. Do you think a part of it had to do with pre-empting what the IIP data could have been?
No, absolutely. The IIP numbers were absolutely mind boggling and I wish we keep on doing what we have been doing for the last couple of quarters. People may have expected very good numbers from IIP and that would certainly aid the sentiment today. But for the continuation of this sentiment, we need some more spate of positive news. Therefore, I would rather wait and watch for the big events that are before us.
What is the concern in terms of inflation, because in the high inflation, high growth scenario, everybody is talking about higher rates. China has already moved up on its cash reserve ratio once again. Does it call for some more stringent action from the RBI?
What is the sense this morning in terms of the range that the index perhaps might trade in?
It all depends on the global markets. Considering there was a good amount of improvement in Dow after a weak opening on Friday, which augurs well for the markets. But, will the Greek proposal by the EU get through, will the budget be in tune with what people really expect, will the fiscal deficit be reined in? All these questions need to be answered, and therefore, taking a clear cut view on the markets for the next 15 to 20 days is a little difficult. I would rather bet my money on the markets post the budget.
We did exceptionally well on Thursday's trade. Do you think a part of it had to do with pre-empting what the IIP data could have been?
No, absolutely. The IIP numbers were absolutely mind boggling and I wish we keep on doing what we have been doing for the last couple of quarters. People may have expected very good numbers from IIP and that would certainly aid the sentiment today. But for the continuation of this sentiment, we need some more spate of positive news. Therefore, I would rather wait and watch for the big events that are before us.
What is the concern in terms of inflation, because in the high inflation, high growth scenario, everybody is talking about higher rates. China has already moved up on its cash reserve ratio once again. Does it call for some more stringent action from the RBI?
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The good part is that the government and the RBI have similar kind of thinking in terms of having a good balance between continuing inflation and maintaining growth. Therefore, I would not be too concerned about stringent measures coming in from the RBI. That will be a phased exit of stimulus from our economy, and therefore, the growth, as we see today at 7-7.5%, in the GDP will continue. So, I am not too concerned on that aspect.
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