Jul 01, 2012 05:44 PM IST | Source:

Know Your Investment: Stocks that you can buy next week

The BSE benchmark Sensex soared by over 410 points to more than two-month high of 17,496.96 in pre-close trade today on foreign fund inflows buoyed by the government's moves to revive the economy.

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The BSE benchmark Sensex soared by over 410 points to more than two-month high of 17,496.96 in pre-close trade today on foreign fund inflows buoyed by the government's moves to revive the economy.

Besides, the Finance Ministry's proposing a monetary limit for invoking the controversial General Anti-Tax Avoidance Rules (GAAR) in its draft guidelines issued late last night lifted the trading sentiment, brokers said. After a firm start, the Sensex advanced further by 410.20 points to 17,496.96 at 1445 hrs, a level last seen on May 2, led by a rally in stocks of finance, auto and capital goods sectors.

The broad-based National Stock Exchange index Nifty spurted by 120.35 points to 5,269.50 on buying by foreign as well as domestic funds. Buying activity gathered momentum after Prime Minister Manmohan Singh, who took additional charge of finance portfolio signalled speedy revival of slowing economic growth.

The finance ministry's proposal that GAAR provisions would be invoked only in cases where FIIs choose to take the benefit of double tax avoidance treaties, providing some relief to funds, also supported the sentiment.

Meanwhile, the rupee appreciated by 47 paise to 56.33 against the US dollar at the Interbank Foreign Exchange market on hopes that the government steps will check the currency's slide, aiding market sentiment. Asian and European markets also surged after late night meeting of European leaders that came up with a plan for a single financial supervisory mechanism for the European region to help stabilise markets.

So what’s the best way to trade the market next week? got Vivek Negi, VP Research, Wellindia Group to answer the stock queries investors asked us on our Facebook page as part of KYI (Know Your Investment). 

Check out his comments.

Dhanpreet Singh: I want to invest Rs 50,000 for the short-term. Which sector should I invest in?

Mr. Negi: Market is looking like breaking out. You can keep a diversified portfolio. Banking, Infra, Telecom, Power, Capital Goods is looking good. Invest for atleast 1 year.

Portia Okafor: Which is the best company to invest in?

Mr. Negi: Every time its going to be a new company. Right now mid-cap banking & power companies are looking good. Power Grid, Reliance Power, IDBI Bank, Central Bank, Karnataka Bank etc.

Umed Kaule: Is this the right time to invest in the banking sector?

Mr. Negi: Of course, interest rates will come down by 100 to 150 basis points before March, 2013. You can expect 30 to 40% returns in banking stocks in next one year.

Oberoi Jatinder: What are your views on Reliance Industries, Reliance Communications and Reliance Power?

Mr. Negi: Buy Reliance Industries and Reliance Power at current levels for long-term. Avoid Reliance communication, other players are better in the same space.

Harry Singh: Is Tata Motors good for two-month investment?

Mr. Negi: Enter between 225 to 235 for a target of Rs. 260.

Ankit Agarwal: What are the future prospects of Yes Bank?

Mr. Negi: It’s a very aggressive bank. Invest for the long-term. You can keep it as one of the options. Many other good companies are available in the same space.

Pal Rajkhowa: What's your view on Tata Power for the short-term?

Mr. Negi: Buy around Rs. 100 & exit around Rs. 110 - 112.

Chandrayee Sarkar: What about Housing Development and Infrastructure (HDIL) and HCL Technologies?

Mr. Negi: HDIL is fundamentally a very sound company. Its good for intermediate. Accumulate on corrections. It may become multi-bagger. HCL Technologies can be bought for long term and expect 20 to 25% returns per annum.

Pavan Kulkarni: What is the future of Mahindra Satyam? Can one see it crossing Rs 100 by Dec 2012?

Mr. Negi: We have a target of Rs. 90 on the stock. Once it can sustain above that level, it can touch Rs. 120.


Ankur Verma: What about Sintex and VIP Industries?

Mr. Negi: Both have corrected sharply. Good opportunity for short term as well as long term investors. Sintex can be bought with a target of Rs. 66 for the short term. Whereas, VIP industries can be bought above Rs. 85 for a target of Rs. 98.

Siddhartha Umesh Shah: I hold 500 shares of Indian Hotels at Rs 66, 200 shares of IRB Infra at Rs 149, and 400 shares of Kolte Patil at Rs 39. I am a long-term investor. Can hold these stocks for three-four years? What are the prospects?

Mr. Negi: Exit from all these stocks and buy ITC, Reliance Industries, LT & Axis Bank.

Swarn Saklecha: What is your view on Gati and JPT Securities?

Mr. Negi: Gati is doing nothing much in terms of business. JPT securities I don’t track. Keep your investments into mid-cap or large-cap companies.

Rahul Burman: What is your outlook on Financial Technologies?

Mr. Negi: Golden days are over for the company. It’s a good trading stock but fundamentals needs to improve in order to invest for long-term. Buy on declines and sell on rise.

Kashish Kumar: I have 100 shares of Steel Authority of India (SAIL) at Rs 98. Should I hold or sell?

Mr. Negi: Shift to Tata Steel or Jindal Steel, you will get better returns.

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