Short-term relief rally seen in India - Morgan Stanley

MUMBAI (Reuters) - India's market is poised for a 10-15 percent relief rally with valuations reaching fairer levels and politics ceasing to be a negative factor, but the bear phase may not be over, Morgan Stanley said in a report on Wednesday.

"The dust seems to be settling on politics with the Left withdrawing support. Of course, we do not expect elections until next year but for the near-term, politics may cease to be a negative factor," it said.

The market seems to be on support levels and oil prices are cooling off for now. These factors along with strong earnings expectations from Infosys Technologies Ltd on Friday may contribute to a possible rally.

Although the April-June earning season may start off well, the brokerage expects the reporting season to be drab, with the BSE constituents likely to post just a 5 percent average growth in earnings year-on-year.

However, earning estimates are likely to be lower by the end of the year, it added.

"The bear market may not be over but some relief could be on the way," it said.