Markets may correct; buy IT stocks, sell NBFCs: Sanjeev Bhasin

NDTV Profit Desk

01 Apr 2014, 08:32 AM IST

The Nifty closed above 6,700 for the first time on Monday, partly because of window dressing by fund managers, who shore up their top holdings to get a better quarter-end price performance on their portfolio.

The Reserve Bank is unlikely to cut interest rates today. Status quo on policy rates could see profit booking across the board.

Markets are in need of consolidation/correction as ETF (exchange traded funds) flows seem to be topping out. Today could see some of that as the RBI's decision is already priced in.

For today, going long on over sold defensives could make money with buying in IT & auto. The selloff could be in the high beta space, where run-up has been very sharp. Also, NBFC's could be under pressure on postponement of banking license decision.

Trading calls for today:

Longs:

1. Buy Wipro: 542, stop loss 532, target 562
2. Buy TCS: 2120, stop loss 2091, target 2230
3. Buy HCL Tech: 1390, stop loss 1371, target 1445
4. Buy Tata Motors: 398, stop loss 391, target 423

Shorts:

1. Sell Adani Enterprises: 368, stop loss 376, target 333
2. Sell Yes Bank: 415, stop loss 422, target 390
3. Sell IDFC: 122, stop loss 129, target 114
4. Sell Reliance Capital: 345, stop loss 354, target 321

Investment call:

Buy Uco Bank: 70-73, 3 month target 110 (Why: One of the oldest franchise PSU bank trading at 0.7 times price to book value. The guidance by the bank has indicated that the worst of the restructuring is over & provision for NPA will decline. With increase in credit in the coming quarters expect rise in profitability).