The main focus of the markets will remain the general elections with the assumption that the Indo-Pak tensions do not escalate, says Nilesh Shah, Managing Director at Kotak Mahindra Asset Management

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“Till May 2019, markets will be far more focused on election results and thereafter on work the government does, “he said in an exclusive interview to CNBC TV18.

"It is always difficult to predict index in the short-term because it is driven on sentiment but investors should focus more on other domestic and global cues," he added.

"With US Fed saying that if needed they would consider adjusting winding down of balance sheet to support growth, to Skymet announcing 50 percent probity of normal monsoon and President Trump's timely tweet on oil prices to OPEC which resulted in oil prices softening a bit – all these factors are in favour of India and will propel the index to go to higher levels, said Shah.

According to Shah, the growth they have achieved so far, is substantial on backdrop of tight liquidity conditions, high real interest rates and limited transmission.

Going forward Shah hopes that the liquidity would ease, interest rates would soften, transmission improve which will then support growth. He further added that growth will be aided by lower US interest rates resulting in better FDI, FII flows and supportive monsoon.

“These together could give market the ability to overcome recent macro numbers, which are not looking that inspiring,” said Shah.

First Published:Feb 27, 2019 10:48 AM IST