Re to appreciate 1-2 per cent, 5000 level will remain intact in Dec: Deven Choksey

Deven Choksey, MD, KR Choksey Securities says huge dollar inflows from the World Bank and from FIIs are likely to keep the rupee strong and the Nifty in 5000 territory at least for this month. Here is what he told ET Now on Thursday morning

Data for December 1 shows that a whopping almost 2300 crores is being bought by FIIs prt of which could be attributed to QIP. But that was a big figure to go by on a single day?

Yes, and I am not totally surprised that the FIIs are actively buying into this market because the dollar is going to remain under pressure - my own senses are saying that dollar may break below 75 levels and ultimately go into 72-73 levels as far as dollar index is concerned and rupee on the similar front. Whenever it breaks below 45.90 levels, possibly we will see rupee going back to around 44.70 – 44.75 levels.

So if you are seeing the appreciation in rupee of around 1-2 per cent from current levels, then obviously I think most of the FIIs start bringing their funds in hurry. As I had said earlier, the $7 billion worth of inflow is coming from the World Bank for infrastructure, education and health purpose against last four years of average inflow of around 2.3 billion, which is substantially higher. This is also going to bring a kind of dollar inflow in January-March quarter, which will put rupee on appreciation track.

So from that perspective, we are going to see a lot of activity in the secondary market. A lot of dollar inflow is likely to come in the month of December as well and we should be seeing systematic allocation of this fund into some of the heavyweight counters as well. That is where I see the market continuing the momentum. We may see small dips here and there on profit booking but otherwise I think 5000 level should remain intact as far as Nifty is concerned - for at least this month.