Markets run ahead of growth numbers: BP Singh

In a chat with ET Now,BP Singh, Executive Director & CIO-Equities, Pramerica Mutual Fund, shares his views on why markets will perform well on expectations.

ET Now: The bulk of the growth recovery in earnings will only come in FY16. The why do you think markets will appreciate by 8%-10% by the end of this year?

BP Singh: Markets run ahead of what happens and always take at least eight quarters view ahead. When market gets an inkling that the government plans two years of consolidation followed by three years of growth, it starts discounting the growth upwards.

If you analyse markets from 2003 to 2007, you will notice that the market appreciated maximum in the period between 2003 to 2005 though in that particular period the growth was not as encouraging as what it was noticed in the period 2006 and 2007.

Yes, there are lot of risk in it but market at this point in time is prepared to take that particular risk.