Expect Nifty to scale 6100-6150 in January: SP Tulsain
The Indian market on the first day of 2013 started on a positive note with the Nifty gaining 0.77 percent to close at 5951, just briefly short of 6000 mark. In an interview to CNBC-TV18, SP Tulsian of sptulsian.com spoke on the market expectation beyond the 6000 level and his targets ahead.
In an interview to CNBC-TV18, SP Tulsian of sptulsian.com spoke about the market expectation beyond the 6000 level and his targets ahead.
Tulsian expects the Nifty to reach around 6100-6150 in January, however cautioning, a mild correction is likely to happen owing to the RBI policy on January 29, which could see interest rate cut by 25 bps to 50 bps. "Some negative views may start coming in that we may not see the rate cut. So I keep a target of 6150 by middle of January," he adds.
Below is an edited transcript of Tulsian's interview on CNBC-TV18
Q: You have been quite positive about the start of the January series. Now that 6000 is likely this morning where do you see it heading next?
A: Keeping a target of 6100-6150 which I gave for the middle of January because I am keeping a cautious stance. A correction may happen on the rate cut on January 29 whether it will be 25 bps or 50 bps. Some negative views may start coming in that we may not see the rate cut. So I keep a target of 6150 by middle of January.
Q: If the markets start around 6000-6050 today, would you jump in and buy or do you think it is late in the rally to be buying at this point?
A: One can take a selective call. I have never been excited by taking a call on the Nifty because if you see the performance and behaviour of the Nifty for last three-four months it has been so range bound. Bank Nifty has given good gains whether you have gone short or long. Those who have gone short in September have made killing and those who went long since October in Bank Nifty have really made killing.
Since now the Nifty future is likely to be at 6050 or so, I am expecting an up move of about 100 points in the next couple of weeks. So I don’t think there will be too much excitement because there may be a correction happening on Friday, day after tomorrow this rally is likely to continue. We will keep seeing the profit booking coming in but the stock specific calls and Bank Nifty for the time being can be a good idea because Bank Nifty can move by 3-4 percent from here on by middle of the month, but again this stock specific call will really give better returns.
Q: There has been a reaction on specific commodities especially copper and yesterday was good for metals. Would you start buying into that space?
A: Metals have been subdued for last couple of months and at the lower levels whether ferrous and nonferrous. Yesterday we have seen the move by increase in the product prices by the ferrous companies, they have raised the prices by 1000-1200 tonnes. I am worried about the off take situation which we see at the ferrous metal level, the kind of inventory pileup.
The HR coil cutters in Taloja belt are operating at 25-30 percent of the capacity so things are very bad whether you talk about the HR coil or even the long products. I am not too bullish on the stocks like Jindal Steel and Power, JSW Steel, Tata Steel, Steel Authority but the kind of product prices and destruction in the value that we have seen in last one month, obviously make these stocks move up. I am keeping my positive view on the non ferrous metals like Hindalco Industries, Hindustan Zinc, and Sterlite Industries going forward.
Q: What are your views about Reliance Infrastructure that had a big performance yesterday?
A: Reliance Infrastructure and Reliance capital have been looking quite interesting. I have been bullish on both of these stocks because the kind of accumulations which we have been witnessing, I am not keeping my positive stance on other ADAG stocks which market generally takes along once they see some slight up move coming in one of the stocks. I am keeping my negative stance on Reliance Power and Reliance Communications but seeing a good up move in Reliance Infrastructure and Reliance capital.
Q: What's going on with PC Jeweller?
A: We may again see some momentum play and that was expressed by me on the day of listing as well, that if I knock off that momentum play which we have seen happening in case of Tribhovandas Bhimji Zaveri (TBZ) after listing about a month later since it started. According to the information or news coming in from the market that some people are involved in pulling up the price. Except that I don’t see any reason for the stock to move up.