When asked if Delhi elections results were weighing on the market – market experts Devang Mehta of Anand Rathi Financial Services, Prakash Diwan of Altamount Capital Management and Siddharth Bhamre of Angel Broking don’t think so.
Diwan says any party coming to power in Delhi will not alter what the Central government wants to do in the Budget. Similarly, Bhamre too thinks Delhi elections results don’t matter and the volatility witnessed in the market is not due to elections for sure.
According to Mehta, earnings were supposed to be the single driver to propel the market up but since they have disappointed and that is clearly weighing high on the markets. So in case there is no revival in earnings growth there won’t be a big upturn in the market although market could witness a small pre-Budget rally.
Talking about the correction witnessed in the Bank Nifty, Diwan says, the December quarter numbers indicate further weakness for the index and it is likely to test new lows but it would not be a washout. However, he expects people to selectively get into banking stocks and says banks like SBI , Axis Bank would stand out as winners.
According to Bhamre, Stock Futures have shorted big time in the last four-five trading sessions. ICICI Bank , Punjab National Bank and SBI are the three banks where huge short positions have been formed mainly by FIIs, says Bhamre. So, Bank Nifty may or may not fall significantly from current levels but these three stocks may not bounce back significantly even when market or Bank Nifty may bounce back, adds Bhamre.
Mehta believes for the last few days, IT and some of the pharma and FMCG stocks have been the saviour for the market whereas the Bank Nifty that had been the leader to take the market up, has also been the leader on its way down.
He is upbeat on the IT sector going forward and is bullish on Wipro , which is available at midcap type of valuatios – 14-15 times one-year forward. According to Mehta one can also nibble into stocks stocks like Bajaj Corp , Pidilite Industries , Zydus Wellness and Emami because whatever happens to Bank Nifty or capital goods stocks – IT, pharma and FMCG will continue to perform going forward.
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