Just when Indian investors thought the bulls have finally arrived at the market and bears gone into hibernation for the time-being, one little cub crawled out and pushed the Sensex down to close below 18000 over the past week. It was the first negative close for the market on a weekly basis since the start of 2012.
Analysts say that the market having rallied nearly 20% in the previous seven weeks helped by inflows, it could be profit-booking or renewed worries about rising global oil prices and the country's widening fiscal deficit that saw the
indices correct downward.
The Sensex closed 2% lower on w-o-w basis while Nifty lost 2.4% over the past week.
In such an environment, does your portfolio have the right equity mix? Is your money parked right to buffer the loss? Sudip Bandyopadhyay, MD and CEO of Destimoney Securities answered queries
Below are the questions and the answers.
Manoj Hirway: Where do you see the market headed in the next six months?
A: Indian markets have been attracting lot of FII inflows during the last 6-7 weeks. Significant improvement in global liquidity situation has facilitated this. While domestic macro factors need drastic improvement, expectations are being built around favourable State Election results for UPA leading to bold policy reforms over the next couple of months.
Subject to the above happening, Indian markets may see new highs during the next six months. Good monsoon will help this cause.
Ra-Vishh Agarrwal: What is your view on NIIT Tech , Uflex and SCI ?
A: NIIT Tech and Uflex are good buy for medium to long term point of view. However, avoid SCI at present, considering the significant over capacities in the shipping industry and the sharp decline in value of Baltic Dry Index.
Simmer Ahluwalia: Can I buy YES Bank , Ashok Leyland and Tata Steel at current levels for 3 - 6 months?
A: Do buy Yes Bank and Ashok Leyland at current market levels from medium to long term perspective. However, due to slow down in growth in China, metal and allied industries are expected to underperform during 2012. Under the circumstances, it is advisable to be cautious on Tata Steel.
Shramnesh Jain: I have Delta Corp and India Infoline in my portfolio. What can I expect them to do in one year?
A: Both Delta Corp and India Infoline are high beta stocks. They are extremely volatile.
However, Indian markets subject to macro economic factors being addressed, are expected to outperform the global markets in 2012. Considering the above, aggressive investors can invest in Delta Corp and India Infoline with one year time horizon.
Shamik Bhattacharjee: Is it a good time to build portfolio or should we wait for another correction?
A: For a long term investor, (i.e. an investor with one year + time horizon), it is good time to start building their portfolio. Since the market has run up quite a bit during the last few weeks, around 20-30% of the investible amount should be deployed now. Wait for some correction before deploying the balance.
K Shitij Singh Sikarwar: I have 1,000 shares of IDBI Bank at Rs 116? What should I do with the stock?
A: Banking stocks are expected to benefit and outperform the broad market during the next twelve months. Interest rates are expected to come down and economic scenario is likely to improve. This will lead to outperformance by the banking stocks. Under the circumstances, an investor can continue to hold IDBI bank for some more time.
Nita Gandhi: Is it the right time to short bank Nifty?
A: This is not the right time to short Bank Nifty. Banking Industry is expected to benefit from likely interest rate coming down and economic recovery in 2012.
Rinkesh Jain: What is your view on Sterlite Industries ?
A: Both Sterlite Industries and Sesa Goa will see significant volatility till the time the ratio for their merger is announced.
Fundamentally Sterlite is a good buy. However, the present volatility on the back of multiple rumors regarding the swap ratio, is not an ideal time for long term investor to buy the stock.
Akshay Arora: As a short term investor, I have 500 shares of IOC at Rs 278. Should I sell or hold it?
A: The oil marketing companies are expected to suffer considering the continuous increase in global oil prices. It is extremely unlikely that the government will be in a position to increase the oil prices proportionately even after the State Election results are out. Thus it is advisable to exit oil marketing stocks.
Imad Ahmedi: I bought 50 shares of Amrutanjan at Rs 810. What should I do with it?
A: FMCG is an interesting defensive space. In some cases, the values of the FMCG companies are looking stretched. In case an investor is willing to hold on to Amrutanjan shares for one year at least, he should wait.
Abha Jain: Should I sell GMR Infra now?
A: GMR Infra is a buy at present for an aggressive investor. Considering the expectation around policy measures favourable for infrastructure sector in the forthcoming Union Budget, GMR is likely to benefit from such measures.
Manish Rooprail: I have RIL at Rs 1050. Right now it's at Rs 835. I can hold for 1 or 2yrs. I also have Rel Comm at Rs 150. Will I get my price in the near future?
A: Reliance Industries for 1-2 year hold is a good investment. The company has many problems which it needs to resolve. However, RIL is an extremely cash rich and fundamentally strong company. It is expected to provide good return over a long period of time.
Rel Comm has suffered from multiple problems including their huge debt burden. Considering that the acquisition price is Rs 150, it will be advisable to wait for some time and exit the counter when the market rallies, next time.
Analysts say that the market having rallied nearly 20% in the previous seven weeks helped by inflows, it could be profit-booking or renewed worries about rising global oil prices and the country's widening fiscal deficit that saw the
indices correct downward.
The Sensex closed 2% lower on w-o-w basis while Nifty lost 2.4% over the past week.
In such an environment, does your portfolio have the right equity mix? Is your money parked right to buffer the loss? Sudip Bandyopadhyay, MD and CEO of Destimoney Securities answered queries
Manoj Hirway: Where do you see the market headed in the next six months?
A: Indian markets have been attracting lot of FII inflows during the last 6-7 weeks. Significant improvement in global liquidity situation has facilitated this. While domestic macro factors need drastic improvement, expectations are being built around favourable State Election results for UPA leading to bold policy reforms over the next couple of months.
Subject to the above happening, Indian markets may see new highs during the next six months. Good monsoon will help this cause.
Ra-Vishh Agarrwal: What is your view on NIIT Tech , Uflex and SCI ?
A: NIIT Tech and Uflex are good buy for medium to long term point of view. However, avoid SCI at present, considering the significant over capacities in the shipping industry and the sharp decline in value of Baltic Dry Index.
Simmer Ahluwalia: Can I buy YES Bank , Ashok Leyland and Tata Steel at current levels for 3 - 6 months?
A: Do buy Yes Bank and Ashok Leyland at current market levels from medium to long term perspective. However, due to slow down in growth in China, metal and allied industries are expected to underperform during 2012. Under the circumstances, it is advisable to be cautious on Tata Steel.
Shramnesh Jain: I have Delta Corp and India Infoline in my portfolio. What can I expect them to do in one year?
A: Both Delta Corp and India Infoline are high beta stocks. They are extremely volatile.
However, Indian markets subject to macro economic factors being addressed, are expected to outperform the global markets in 2012. Considering the above, aggressive investors can invest in Delta Corp and India Infoline with one year time horizon.
Shamik Bhattacharjee: Is it a good time to build portfolio or should we wait for another correction?
A: For a long term investor, (i.e. an investor with one year + time horizon), it is good time to start building their portfolio. Since the market has run up quite a bit during the last few weeks, around 20-30% of the investible amount should be deployed now. Wait for some correction before deploying the balance.
K Shitij Singh Sikarwar: I have 1,000 shares of IDBI Bank at Rs 116? What should I do with the stock?
A: Banking stocks are expected to benefit and outperform the broad market during the next twelve months. Interest rates are expected to come down and economic scenario is likely to improve. This will lead to outperformance by the banking stocks. Under the circumstances, an investor can continue to hold IDBI bank for some more time.
Nita Gandhi: Is it the right time to short bank Nifty?
A: This is not the right time to short Bank Nifty. Banking Industry is expected to benefit from likely interest rate coming down and economic recovery in 2012.
Rinkesh Jain: What is your view on Sterlite Industries ?
A: Both Sterlite Industries and Sesa Goa will see significant volatility till the time the ratio for their merger is announced.
Fundamentally Sterlite is a good buy. However, the present volatility on the back of multiple rumors regarding the swap ratio, is not an ideal time for long term investor to buy the stock.
Akshay Arora: As a short term investor, I have 500 shares of IOC at Rs 278. Should I sell or hold it?
A: The oil marketing companies are expected to suffer considering the continuous increase in global oil prices. It is extremely unlikely that the government will be in a position to increase the oil prices proportionately even after the State Election results are out. Thus it is advisable to exit oil marketing stocks.
Imad Ahmedi: I bought 50 shares of Amrutanjan at Rs 810. What should I do with it?
A: FMCG is an interesting defensive space. In some cases, the values of the FMCG companies are looking stretched. In case an investor is willing to hold on to Amrutanjan shares for one year at least, he should wait.
Abha Jain: Should I sell GMR Infra now?
A: GMR Infra is a buy at present for an aggressive investor. Considering the expectation around policy measures favourable for infrastructure sector in the forthcoming Union Budget, GMR is likely to benefit from such measures.
Manish Rooprail: I have RIL at Rs 1050. Right now it's at Rs 835. I can hold for 1 or 2yrs. I also have Rel Comm at Rs 150. Will I get my price in the near future?
A: Reliance Industries for 1-2 year hold is a good investment. The company has many problems which it needs to resolve. However, RIL is an extremely cash rich and fundamentally strong company. It is expected to provide good return over a long period of time.
Rel Comm has suffered from multiple problems including their huge debt burden. Considering that the acquisition price is Rs 150, it will be advisable to wait for some time and exit the counter when the market rallies, next time.
