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• In a chat with ET Now, Sanjeev Prasad , Senior Executive Director & Co-Head, Kotak Institutional Equities, shares his views on the markets. Excerpts:How will the Indian markets move in the first week of April? Will it be decided by global liquidity and crude?Sanjeev Prasad: It is going to be a combination of everything. Global liquidity continues to be pretty strong based on the second round of LTRO presumed on a kind of liquidity available, which can come into the market.On the other side, we have to wait for state election results, which are due out today. You have the credit policy on March 15 and you also have the budget.

• It is very hard to take a call on some of these factors because the market already seems to be factoring in some improvement in terms of a fiscal position next year and also a decline in interest rates.Unfortunately whatever we are seeing with respect to crude prices can derail both these expectations. If you have looked at our own number for fiscal deficit, we are currently forecasting 5.4% for 2013 and that's based on the pretty benign set of assumptions assuming crude oil at about $110 a barrel average and some increase in domestic selling prices.

• If the crude prices continue to be above 120, fiscal deficit number is definitely going to be much higher and that also means that the Indian government has no option but to increase prices for the domestic market.It means inflation numbers, which people are projecting to come down, may not decline to the same extent, which also means that declining interest rates, which the market is banking on, has another trigger for the market and may not play out fully.So this crude oil is becoming a pretty big issue for the Indian market. It has serious implications for fiscal deficit, current account, inflation, everything, and unfortunately at this point of time India does not have too much in its defence.

• ET Now: As of now markets are making an assumption that if SP comes back, it is time to buy sugar stocks, ADAG Group stocks and some Godrej Group stocks and it is time to sell JP Group stocks. Are the assumptions right?

• Sanjeev Prasad: I do not want to get into the political connections of all these companies, but the stock prices are pretty much telling which companies are aligned with which political party. I guess that's how the market is treating some of these names.

• ET Now: Is it time to buy JP Associates even though SP is back? So how would you address that query?

• Sanjeev Prasad: I thought whatever we understand JP is more aligned with the BSP. So I do not know how this changes equation as far as JP's operations in UP are concerned, but presumably it should not matter too much in either way. So, anyway let's wait and watch what happens over there.

• ET Now: Globally things are looking slightly tired and toppy? Dow is struggling to cross or stay above 13000, crude prices are now at a fresh nine-month high and China has cut their GDP forecast for this year from 9% to 7.5%...

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