Sanjay Sinha, Chief Executive Officer, DBS Cholamandalam Asset Management, spoke to Peter Noronha in light of the credit policy review by the Reserve Bank of India.

There is no co-relation between the credit policy and the day's market weakness, according to Sinha. The correction was bound to happen, given the run-up in the past weeks and an impending end to the results season.

This is a crucial week. The much-awaited credit policy is now out of the way. But there are still two more events stacked up. The F&O expiry would take place on Thursday and the result season will come to an end by the weekend. After the result season is out of the way, the markets will factor in the full impact of the corporate numbers and accordingly re-adjust its valuations.

The markets are likely to consolidate in the next few weeks. New reform initiatives by the government and a recovery in global equities will set the tone thereafter. 

Policy announcements on the domestic front should be incrementally positive, but the direction of global markets is open to question.
And the demand for commodities will also have to sustain.