Big bull Motilal Oswal, Chairman and Managing Director of Motilal Oswal Financial Services, shares his views on the market scaling new highs on Monday.

How long will this euphoria sustain?

Two factors which will decide the sustainability of the rally is the final number tally once election results are announced on May 16 and clarity of the early decisions taken by the new Government.

We continue to remain hopeful as the expectation is 275-plus for BJP-led NDA. There is still scope for upside in several beaten down sectors.

Which sectors could see a re-rating or de-rating in this rally?

I don’t think there will be any de-rating.

But there are several weak sectors such as infrastructure, power, cement and PSU banks where there is scope for re-rating.

IT and pharma, meanwhile, are two sectors that have done well and are expected to continue doing so, if we see a clear majority of 275-plus for the NDA.

Isn’t there too much expectation from one man — BJP’s PM candidate Narendra Modi?

Yes, it is true there is over-expectation in the market. But, at the same time, it is expectation not just from him but also on the decisions that will come from his Government. There have been a lot of promises, but clarity on their implementation is awaited.

How much foreign flow will come into India if we get a stable Government?

After interacting with a lot of foreign investors, it is clear that they are upbeat if Modi comes to power.

However, the stability of the currency and the shape of the political scenario will dictate foreign fund flow into the country.

Would you advise a sell on rise-rally till May 16 or hold for ever?

I don’t think people should sell but again it depends on what stocks you hold and your risk appetite.

Unless there is a negative surprise in the election results, the medium- and long-term views are bullish for the markets though traders ought to remain cautious in the short term owing to high volatility.

Will you advocate an SIP for retail investors or buy and hold for a two-three year time-frame?

I would advice retail investors to buy right and sit tight. SIP is a product for all seasons but right now what is important is that investors increase the equity allocation in their investment portfolios.

Any year-end targets that you would like to share?

It is difficult to predict numbers but overall I am bullish.

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