Stock Market

Mkt to be attractive at 7500; see 75 bps cut in FY16: UBS

Gautam Chhaochharia of UBS expects a cyclical recovery to play out next year with falling interest rates acting as the big catalyst. UBS expects FY16 earnings at 8 percent, FY17 at 16 percent. He pegs year-end target for Nifty at 8200.

Unless Reserve Bank (RBI) Governor Raghuram Rajan surprises the market with bigger cut than what the street is expecting, it will be difficult to move to a positive zone, says Gautam Chhaochharia of UBS. He strongly feels Nifty will be attractive at 7500 levels.       
Chhaochharia expects a 75 bps cut in repo rate in FY16 and is on the same page with the street which is expecting a 25 bps cut today.

Speaking to CNBC-TV18, Chhaochharia said the global situation is quite precarious and India cannot not be affected by it. “Meltdown in China will drive further selling in India,” he says. However, he expects a cyclical recovery to play out next year with falling interest rates acting as the big catalyst. UBS expects FY16 earnings at 8 percent, FY17 at 16 percent. He pegs year-end target for Nifty at 8200.

He is underweight on two wheelers and neutral on others, barring Maruti and house maintains  overweight stance on Pharma and banks . He is particular;y optimistic on public sector banks on the back of measures taken by the government.