In an interview with Ashwini Kunder of myiris.com, Alex K Mathews, Head of Technical Research, Geojit BNP Paribas opined, "Market has corrected in the recent past but the valuations are slightly over stretched."

1.The pre-budget rally has already begun with the return of foreign institutional investors. Where do you see Sensex and Nifty levels?

FII are cautious in the recent past may get into the market during budget, if the budget proposals are investor friendly.  Global cues are not very rosy because of Greek financial crisis and Ukraine tensions along with strong dollar can cause huge volatility ahead of the budget.

Nifty made a low at 8,565 on February 10 completing its short term downward trend and markets are poised to move upward in the next couple of days Nifty technically is trading above its crucial support at 8,470 (50DMA), 8331 (100 DMA) and 7941 (200 DMA), these levels can act as supports.  Nifty likely to test  9,350 - 9,500 levels, despite geopolitical risks.

In the case of Sensex on 10th February it tested its 50 DMA at 28,044 and reversed its direction is likely to trade higher in coming days.  Sensex has supports at 28,092 (50DMA), 27,743(100 DMA) and 26,524(200 DMA).  Monthly charts are suggesting a  levels of 31,000 - 32,500 in the days to come.

2. Do you think the market valuations are reasonable?

Market has corrected in the recent past but the valuations are slightly over stretched when we are comparing with MSCI emerging market index.

3. What are your expectations from the upcoming Budget?

I am expecting an investor friendly budget with special emphasis to the infrastructure growth; increased deduction allowed under section 80C, Reduction in subsidies, abolishment or lowering of STT. Implementations of key reforms like GST, Tax incentives for e-commerce sector etc are also the other ones in the list.

4. Which stocks or sector you would prefer in the run-up to the Budget?

Prefer infrastructure, metal, mid - cap IT, logistics and capital goods sector.

5. How do you read CPI and IIP numbers?

CPI based inflation rose to 5.1%, because higher food prices.  IIP is yet to see a sustained recovery despite of low inflation.

6. Is Indian economy growing at faster pace as suggested by re-based GDP numbers?

India changed the base year for calculating GDP from FY04-05 to FY 11-12, which gives us the true structure of the economy.  Under the new method our growth is overwhelming.  The re-based GDP is higher than the estimates of the Central bank which uses the old method.