Rishi Nathany, Director, Touchstone Wealth Planners, spoke to Puneet Wadhwa on the markets.
 
The markets had been range bound for most part of August 2010. How do you expect them to pan out in September?
 
September is expected to be devoid of any major scheduled news triggers, with quarterly results coming in October. We expect the markets to remain volatile within a broad range.
 
What are the likely triggers for them to sway on either side?
 
The markets are likely to be largely reliant on corporate earnings to seek further direction.
 
Reliance Industries (RIL) has been foraying into unrelated businesses – telecom, hotels. Do you think that the company has spread itself too thin?
 
RIL has huge cash reserves, so it would be incorrect to say that they spread themselves too thin. However, such unrelated diversification does not send across a very good message regarding the focus of the company on its core business. In fact, their retail venture has also not yielded the desired results till date.
 
Do you expect the Reserve Bank of India (RBI) to hike rates in the September review? If so, what is the hike you expect?
 
Rate hikes may come, but they are expected to be very carefully calibrated. The RBI is doing a fine job in trying to rein in inflation, while not upsetting the growth of the economy.
 
Therefore, we do not expect any nasty surprises on the rate hike front and expect reasonable rate hikes, if any.
 
What is your opinion on the recent Q1 GDP numbers?
 
The GDP numbers are very encouraging and we expect this growth momentum to continue.
 
Auto companies have posted healthy set of sales numbers for August 2010. Do you advise investing in this space in FY11?
 
Autos continue to do well and one could look to invest in this sector, provided one finds value investments. Since most auto stocks have run up substantially, one could also try to find value buys in the auto ancillary space.
 
Before we wrap up, please give us your disclosures
 
It would be safe to assume that we/our clients have an exposure to the sectors discussed herein.