What is your reaction to the fact that we have touched 5000 on the Nifty?

In fact 5000 is one more landmark and it does not come as a surprise because fundamentals have improved over last few couple of weeks. Primarily, monsoon news has been good and this coupled with global liquidity and positive cues from global market, markets have been on the up move.

There is a view expressed in the market that currently its momentum and liquidity which is driving the market. Last time when we touched 5000, Indian markets had global support, earnings were also favourable?

I would not fully agree with that - if you look at corporate earnings or advance tax figures for second quarter then there is significant improvement and we should not forget that the last time it touched 15000 for the first time, it was about 2 years back, so earnings also have gone up say on an average 25% to 30%.

So this or the 5000 Nifty is equivalent to say maybe 4500 2 years ago or maybe 4300 2 years ago. So, earnings have kept the momentum even in an adverse year. The earnings in aggregate went up by 10%. This year we expect growth to be around 20%.

Another very important fact is that Indian macro fundamentals are far superior compared to other emerging markets, even China I would say and therefore the flow of foreign capital will continue. Unless you see something unexpected or completely catastrophic which we cannot foresee today, I think the market undertone will continue to remain bullish.

How do you read the complacency that has set in to this market, if you are looking at the put-call ratio for September, it is already 2, that is a high number to contend with. You have seen the October futures also trading in at discount. Are we just setting ourselves up for a decline in the near term, is that a worry that people should have at the back of their minds?

No, on the contrary I would say that if there are enough number of puts and the short positions in the market that is good because, now if there is a negative news, then they can absorb the shock because there will be covering there and I would not read too much into these numbers of outstanding F&O positions or put-call ratio.

If there is a flow of FII capital in the market then you will see market rising and the ratio put-call today is in favour of put as compared to what it has been in the past, so in a way that shows that market has not overbought on the security side.

So, now in the next 6 months what targets would you be looking at on the Nifty and the Sensex then?

I would say that the market has already run up a lot in terms of discounting fundamentals of the next 6 months, so market should consolidate in this range which is Nifty maybe up to 5200 on the upside and on the lower side 4800 to 4900. So market now has already taken the positive news and it is on the numbers and prices. So at these levels, I would say market will now consolidate, there maybe 5% up move from the current level and there will be huge resistance of 5200 level