Analysts see opportunity in pain; bet on beaten down blue chip stocks
The Sensex sank to a 15-month low on Monday with the Sensex closing below 24,000 level at 24,893.81 and the Nifty closing at 7,558.80 its lowest level since August 2014, down 96.25 points.
Mumbai: The Sensex sank to a 15-month low on Monday with the Sensex closing below 24,000 level at 24,893.81 and the Nifty closing at 7,558.80 its lowest level since August 2014, down 96.25 points.
“This is a pain with opportunity moment for investors,” said independent analyst Ambareesh Baliga who had predicted earlier to this correspondent that it would go below 24,000. The blue chips, he said, have lost 15-20 per cent with ICICI Bank down 30 per cent since the trend started.
He said, “The main question is, ‘Is the India growth story over?’ If yes, then it means the government won’t deliver and we are in bear market. If not, this is a correction in the long term and the market is down due to global cues. We are in a sweet spot compared to our global peers and we have a big advantage of not being export dependent like other countries.
Despite the rupee’s current weakness it is still the best performing currency. The Modi government should deliver in the next two to three months as his team has been doing the groundwork.” Then it will be a big opportunity for those who missed out earlier, he added.
Vinod Nair, head, fundamental research, Geojit BNP Paribas Financial Services Ltd, however, said, “India was earlier being secluded from global concerns in expectation of reforms, which have got derailed. The equity market is very sensitive to FII outflows and FIIs are very concerned about the US rate hike decision which is likely next week.”
But, he added, “This chaos is providing huge opportunity to the retail investors to invest in high quality stocks and as the global concerns stabilise, we are likely to emerge as one of the best markets”.
Alex Mathews, head research, Geojit BNP Paribas FSL, said the domestic markets on Monday opened with a positive note tracking the mixed global cues. But the concerns on the Chinese front and weak monsoon forecast also dampened the consumers’ sentiment.
The Nifty volatility index, India VIX closed at 26.3500, down around 0.27 per cent. The mid-cap and the small cap sector ended down around 2.19 per cent and 1.76 per cent respectively.
All the sectors ended in red and the major losers for the day were health care and metal. The gainers were Tech Mahindra and HDFC, up around 1.29 per cent and 0.99 per cent respectively whereas the losers were NMDC and Bosch, ended down 4.43 per cent and 3.97 per cent respectively. Gaurav Jain, director, Hem Securities said the rupee hitting two-year lows raised concerns of the Nifty breaking down its psychological level of 7,500.
( Source : deccan chronicle )
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