Is there further downside to markets?

The markets were slaughtered today with Sensex falling nearly 800 points. Global equity markets are going through this pain. The obvious question in front of us are whether we have bottomed out? If yes, what sectors and stocks can one enter into? If no, how much more downside are we going to see?

Experts have different expectations and predictions for the markets. According to Gaurang Shah of Geojit Financial markets should not go down much going ahead. He prefers stocks from pharma, metal, infrastructure, real estate space and capital goods space. In the steel sector he likes stocks like Tata Steel and SAIL and Hindalco in the aluminium space.

In the real estate segment he likes HDIL and Akruti Nirman. Capital good frontliners like L&T, BHEL also look good.

However technical analyst Rajat K Bose is of the view that markets can go down further. 14750 is the support for the Sensex. If negative news keep coming in Nifty will test its January lows of 4448. Individual stocks and sectors will go down further. Look of weakness can be seen in largecaps also particularly new index entrants like Power Grid and Jaiprakash Associates.

Technical Analyst, Ashwni Gujral is of the similar view that Nifty has a support at 4200 levels. If it falls to 3600-3700 levels there will be 50% retracement. If Nifty goes past 5012 one can assume that markets have bottomed out. He advices investors to stay away from the markets.

Deven Choksey of KR Choksey negative news of IIP numbers, yen unwinding and oil prices have negatively impacted the markets. But there is some positive news expected from advance tax numbers, Fed rate reduction and rate reduction in domestic front, which can cheer the markets.

He continues to recommend frontliners like Reliance, real estate players like DLF and Unitech look attractive. Banking stocks will be favoured if interest rates come down going ahead. SBI and PNB look good. Even capital goods like BHEL and L&T are interestingly valued now.