After a lacklustre week, the India market ended in red on Friday with the Sensex closing at 19468, down 29 points and the Nifty closing at 5887, down 10 points. In an interview to CNBC-TV18, SP Tulsian of sptulsian.com says, though the past two weeks have been dull and no major rally has been seen in the market, as we move closer to the Budget we may see some good rally. "Next two weeks maybe quite eventful and we may expect an upside of about 150-200 points on the Nifty," adds Tulsian.
Further, Tulsian is bullish on Adani Enterprises and Reliance Capital for this week. He also recommends investing in cement sector and suggests a buy on Century Textiles. From the banking space Tulsian bets on Allahabad Bank.
Below is the verbatim transcript of SP Tulsian's interview on CNBC-TV18.
Q: The market has not given any major leeway to either the bulls or the bears. We haven’t seen a free fall sort of a situation in the market, no great breakdown and also on the way up there is no impetus. Do you think it will be more difficult for traders to make money in the run up to the Budget?
A: The February series started on 1st February and will end on the Budget day which is 28. First two weeks have been quite dull and boring. Maybe with mild weakness or maybe mild negative bias, largely because you don’t have any hopes on the Budget or you are not taking a direction on the expectations from the Budget. But that does not mean that things are going to remain negative till Budget.
In the last two weeks starting from tomorrow, we will have good amount of activity building up on the Budget front. Maybe the so called pre-Budget rally or the expectations will start building up. Indications of that has been seen on Friday in late trade where a lot of shorts seem to have closed in the midcap stocks and maybe in some of these stocks we have seen the renewed buying coming back as well. So, that gives an indication that maybe this next two weeks will be quite eventful and we may expect an upside of about 150-200 points on the Nifty.
Q: What are the key events that you would watch out for? If you had to list out a couple of them, which ones would they be?
A: It all depends on the expectations from the Budget, with respect to non-increase of the corporate taxes, now the goods and services tax (GST) hopes have started reviving that government may provide Rs 12,000 crore as a share of the central government for the GST. Then, non increase of the corporate tax, focus on the infrastructure and the oil and gas space because if the government has to curtail the current account deficit, also some focus or some impetus has to be given to the oil and gas sector.
We are seeing the import of USD 15 billion of crude oil every month and the current account deficit of USD 20 billion is largely because of that. Overall, the expectations will start building up with some hope to increase the threshold limits for the individual anywhere between Rs 2.5-3 lakh.
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Q: Which stocks are you recommending this week?
A: I would not recommend taking a longer view. I have suggested Adani Enterprises and Reliance Capital. In case of Adani Enterprises, we see good amount of volatility happening but one also has to see the pattern of trading taking place in the stock. Adani Port, which is subsidiary of this company, got a relief from Supreme Court (SC) by having a stay on the Gujarat High Court judgement. The move by SC will be seen positive more for the Adani Enterprise being the holding company rather than Adani Port though the positive view can be taken on both.
For Reliance Capital, there has been a lot of confusion and selling in all the ADAG stocks. Reliance Capital looks the best amongst the lot having bottomed out and huge shorts having built up in the counter. In fact, Reliance Communication has seen a good amount of recovery on Friday, but I have chosen Reliance Capital largely as value buy maybe because of short covering and the value buying at the lower level.
I am also quite positive on the cement space and that has been reflected from a small upmove in ACC and Ambuja. I have chosen Century Textiles which is again cement and real estate play and looks to have bottomed out. I see a recovery of five-six percent in one week or so. The last stock that I look to buy is Allahabad Bank because amongst the midcap PSU banking stocks, since I am keeping my positive stance on Bank Nifty and midcap PSU banking stocks having battered and having settled this, two stocks came to my mind, Allahabad Bank and Syndicate Bank. Allahabad Bank looks a better buy from a one week perspective.