Rishi Nathany, Director, Touchstone Wealth Planners talks to Puneet Wadhwa on the road ahead for the markets.

What is the outlook for interest rate sensitive sectors such as banks, auto and realty given the recent RBI move?

The RBI move on interest rates has been very carefully balanced to continue growth while trying to rein in inflation. We do not expect rate sensitives to be adversely affected by the recent bout of rate hikes, given the robust demand in the economy.

The cement sector has been plagued with over capacity and soft prices. When do you see a state of equilibrium in this sector?

It will take time. Lots of new capacity will come in the market, leading to excessive supply.

Do you suggest buying into frontline cement stocks at current valuations for the long-term?

Not at present. I would like to wait for further corrections before taking fresh positions.

Most of the companies would have announced their Q1 results by end of this month. With the RBI's policy review also behind us, what are the likely triggers for the markets now?

There aren't many immediate triggers for the markets in the near future. Overall, the next couple of months could be very lacklustre in terms of news flow.

Where do you see inflation in the medium-term? By when do you think it will peak out?

It could still be high, but hopefully begin to cool-off. It is very difficult to say when it would peak out, since it is very much dependent on the monsoons.

A few banks failed the stress test in Europe. Does it give you any reason to worry about the overall economic recovery? Do you expect more trouble brewing in Eurozone that can upset global markets?

A few banks failed these stress tests, but a large majority passed them, which augurs well for the overall global economic recovery. We believe that the worst in terms of panic could be behind us, barring any nasty surprises.

HUL reported a 1.8% fall in its net profit for the June-end quarter despite higher sales. How do you see things panning out for the FMCG sector in FY11?

We see increasing competition and falling margins. However, this could be offset with higher volume growth across most segments. Overall, a positive view on this segment.

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