Tuesday witnessed another day of consolidation for the market with the Nifty fluctuating within a 100-point band, before finally ending flat. Banks continued to see selling pressure while pharma and oil stocks saw buying interest. The 30-share BSE Sensex fell 30.30 points to 28161.72 and the Nifty closed below the 8550, down 7.95 points at 8542.95.
Calling the day a classic tug-of-war between the bulls and the bears, Devang Mehta of Anand Rathi Financial Services, said it was a day of fluctuating fortunes for today’s markets. He however feels that the market is somewhere near the bottom after witnessing some brutal amount of correction from the top. “The market has corrected 5-6 percent from the immediate top but banks, both private and public, have corrected 11-12 percent.
We feel that somewhere around 8400-8500 is our valuation support which would be used by people who want to enter this market to buy good-quality stocks,” he said.
According to Mayuresh Joshi of Angel Broking, the fear factor associated with banks is their NPA problem. He feels the PSU banks will have some amount of issues in terms of stress onto their balance sheet. “Having said that, ICICI Bank was one of the private sector banks that did disappoint in terms of expectations of asset quality,” he said.
Joshi expects the credit growth to start picking up over the next 2-3 quarters, with structural rate cuts coming through by the RBI. He thinks the kind of stress that one starts expecting incrementally should start coming down. “I think fresh slippages, fresh restructuring should probably start tapering down.”
Amidst the clutch of both private and public, Angel likes Axis , ICICI and YES Bank from the private space and SBI and Bank of Baroda among the PSUs.
Rahul Mohindar of viratechindia.com is not worried over stocks like ACC and Tata Motors , which took the maximum beating, from the long-term perspective. “We have seen two weeks of corrections and the support is bound to come in. Right now the markets are going to mark time and may not see significant up or down over the next few days,” he said.
He thinks weakness clearly seen amongst the banks. “If you ask me as a short-term trader even now the frontline banks look a little weak. But if you are trying to use the current weakness (market correction) from buying perspective then I think I would look at stocks like Infosys , TCS from the tech space and Aurobindo Pharma from the pharma pack,” Mohindar said, adding that tech and pharma are the sectors to be in.