Tips for Trade: Nifty to cross 5000 soon, pick banks, avoid realty stocks
Facebook's shares dropped to an all-time low of $25.75 on Tuesday, more than 30 percent below their offering price. The No. 1 social network has shed about $32 billion of its value since its haphazard May 18 IPO.
India’s equity market finished flat on Tuesday after a volatile session. The BSE Sensex index closed at 16020.64, up 32.24 points or 0.20 per cent, while the NSE Nifty index ended at 4863.30, up 15.15 points or 0.31 per cent.
On our show Tips for Tomorrow, Sanjay Sachdev, President & CEO, TATA Asset Management and Prakash Diwan, Head Institutional Client Group, Asit C Mehta, discuss the market performance of the day.
MARKET OUTLOOK
Sanjay Sachdev feels that a sense of direction is needed for the market right now and reforms by the government will be a key trigger.
Prakash Diwan expects the market to get some strength from the current levels. “Expect the Nifty to cross a 5000 mark within the next one week. Currently, there are a lot of shorts in the market,” he said adding that a short covering might happen on some positive news in the markets.
ON FMCG SECTOR
“GDP numbers confirm the correction in the sector. Our consumption story is not keeping with the expectations,” said Sachdev.
In Diwan’s view, investors are booking profits after entering at lower levels in the FMCG stocks and the profit booking at these volatile times is advised in FMCG stocks. “One can move from tier-1 stock to tier-2 stocks in this sector,” he explained.
REALTY STOCKS
Realty is an over-blown sector, says Sachdev adding that there will be further downside in the sector.
Diwan said that the realty stocks are in oversold zone according to valuations. He feels that these stocks might perform well if money from overseas markets starts coming in. “If the rupee devalues further, we may find enough takers for realty stocks. As soon as the market environment improves globally, one can look at Prestige Estates, DLF, Indiabulls,” he advised.
BANKS
Banks with lower NPA, slippages look attractive in Sachdev’s view.
Rate cut anticipation building up in the bank stocks, says Diwan. “One needs to be selective among banks. Dena Bank, SBI are top picks among the PSU banks, while Yes Bank, IndusInd Bank are top picks in the private sector banks,” he added.
OIL STOCKS
“Shares of the distribution companies look relatively good,” said Sachdev.
“A decline in crude prices has already been priced in. If crude continues to remain soft, shares of oil marketing companies will benefit,” said Diwan adding that he sees a good upside for OMCs if the government takes some decision on LPG, diesel price hike. He advises buying BPCL among other OMCs.
