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Market is pricing in election outcome: Raamdeo Agrawal

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Foreign investors have turned bullish on India as Lok Sabha elections inches closer and are showing more enthusiasm in investing in India compared to domestic investors, said Raamdeo Agrawal, co-founder of Motilal Oswal Financial Services.

“Foreigners are pretty bullish about India, they have scored record in terms of – in one month how much they can pump, they are showing the capability.

If you do the right things, I can do 30,000-40,000 crore in a month. I don’t think domestics are that convinced in terms of investing, they have been net-net negative or kind of flat, they are not showing the kind of enthusiasm foreigners are showing,” he said.

Agrawal pointed out that domestic investors may be nervous about macro data. “There is some disconnect in the conviction level of both sides of the investing community. There is no net flow into the domestic mutual fund (MF) or domestic asset management companies on the equity side,” he said.

On May 23, we will come to know which way things move. That could be one big event. This credit discontinuations or disruptions, which have happened in last six-seven months after IL&FS, I think that is being repaired continuously by government and Reserve Bank of India (RBI) in their own way. So the markets have to come in terms with that,” he added.

BJP seats between 245 to 250

Agrawal said a majority of traders are betting on 245 to 250 seats of the National Democratic Alliance. “My sense is the betting market is saying 245-250. So I would say the market is standing at that level – it is less than 282 to 245-250.

“However, there is also a segment of society which says that it could be even significantly lower than that. There are some people who are saying that it can be higher than 282, maybe small minority but that is there. There is some segment of society saying it could be 300 or more than 300.”

Agrawal said a seat tally below 150 could be very negative for the market. “By chance, it comes to 150 or similar, the market will definitely get a shock.”

“In this kind of a social media impacted voting population, one-two speeches around election time can swing things by 4-5 percent votes. The market will react but I don’t think it is a make or break in life event. 5-10 percent up and down and we are fine.”

Source: CNBC-TV18



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