In the current volatile market scenario, one can invest in strong companies like Tata Motors and LIC Housing Finance. But one should stay away from PSU banks as of now.
In the current market scenario, one can park funds in companies with strong fundamentals like Tata Motors and LIC Housing Finance advises Deven Choksey, MD, KR Choksey Shares and Securities. “These stocks are substantially battered down. But I would prefer some positional buys apart from long-term investment in them,” he told CNBC-TV18.
On the flipside, he is not too upbeat on banking sector and recommends staying away from public sector lenders. Those looking to trade banks can bet on ICICI Bank and Axis Bank for some bounce back, he added.
Below is the edited transcript of Deven Choksey’s interview with CNBC-TV18
Q: What are you noticing? We are hearing that there is some support coming in from Domestic Institutional Investors (DII) and also there is no fresh shorting activity. What are you witnessing in the markets today?
A: 55 points recovery from the low of the Nifty at this point of time is largely supported by the some arrest in rupee’s fall. The dollar-Nifty chart it has come to an interesting support level of last three-four years. If it is not breaking this support level then it suggests the signs of some amount of recovery on the Nifty chart. That is where I believe that the market is taking some amount of support. I feel that the market would get steady at around 5300 before it detects a next move.
Q: Would you stick your neck out and give any trading strategies on the buy side or will you wait and watch?
A: It is always difficult to put up a trading strategy in this kind of a market, but as the fundamentals are strong I would like to put some amount of money into the companies like Tata Motors and LIC Housing Finance to name few. They are substantially battered down. Given the fundamental strength in both these companies I would prefer some positional buys apart from long-term investment in these companies.
Q: We are seeing some recovery on the Bank Nifty as well? Do you think it is a dead cat bounce or would you put some money in the banking space?
A: I am not too sure. I am not very comfortable putting money into Bank Nifty at this point of time. Many of the PSU banks are going to show some amount of distress. In a most unfortunate situation, one is going to see some PSU banks reporting mark-to-market losses as the bottom-line.
This is not giving me comfort to buy into banks across the board. Some banks like ICICI Bank or Axis Bank could possibly give some bounce back in this kind of a market. Fundamentally, I would like to buy only when clarity emerges. But till that point of time if someone wants to trade then ICICI Bank and Axis Bank could give some bounce back.