We are fairly bullish that we are going to see a downward trend in terms of inflation: Nirav Sheth

In a chat with ET Now, Nirav Sheth of Edelweiss Financial Services shares his views on the market.

ET Now: What do you sense would happen in the month of July given that there is a trigger in the budget?

Nirav Sheth: It is very difficult to take a call in terms of what is going to happen next month. We are sure that equity will be a place to be for the next three to six months and therefore the next couple of years. However, it is very difficult to hypothesise the run up in the market and the fact that markets have made new highs, because earnings have made new highs every year for the past five years. Markets never tend to move in a linear fashion. It is very critical to try and figure out what the market is going to look forward to. Firstly, the budget is going to be critical, not so much in terms of what it delivers for FY15, but for what it lays out in terms of the vision for the next three to five years for economic growth. Secondly, what is more critical to us at this point of time is how the inflation trajectory will move forward. Barring some six sigma event, we are fairly bullish that we are going to see a downward trend in terms of inflation. That means that my interest rate expectations will get recalibrated on the lower side and that is equity positive.