After a bout of correction, Indian equity markets seem to have changed track again, upwards. The National Stock Exchange’s Nifty 50 closed Monday at 4,898 bouncing back after a brief but strong correction to about 4,600 levels.

The road ahead

The Indian market has been rising on the back of the weakening dollar, feels Jitendra Sriram, VP & Fund Manager – Equities at HSBC. “The markets will remain volatile ahead because the amount of cues that’s are coming in from global sources whether be the euro zone or US remains mixed,” he said.

The market looked a little expensive at Nifty 5,000 levels, Sriram said. “To our mind, either there is a time value where corporate earnings catch up or there is a pullback in the index, which will tempt investors to come back and buy into the market.”

“A lot of people are still convinced that market is just not yet a buy on rallies or aggressively buy on dips,” said Sajiv Dhawan of JV Capital Services. “There are a lot of people looking to short and they are expecting the markets to fall further in month of November-December.”

“Personally speaking we are on the long side as we do follow strict levels, there is no reason as of now to short, I think that time is obviously gone but sentiment remains skittish,” he added.

Dhawan’s advice is to keep buying but with strict stop-losses.

View on stocks/sectors

Banks: “It’s an investment call; you buy the dips,” Dhawan said. “The stocks corrected maybe 10-15% plus from their highs. The negative news in the form of higher interest rates ahead if factored in into the prices to an extent. It’s still full of potential of mergers and acquisitions, you have seen ministers discuss their state banks saying they would like bring their down holding into that stock. You have seen private sector banks like ICICI Bank, HDFC Bank having several ‘buy’ recommendations,” he added. “Across the board whether it’s a PSU, private banks for us it’s an investment call and you buy on any sharp decline.”

Aviation: “From a near-term perspective there are various triggers,” said Sriram. “One is you are entering the busy season in terms of tourist arrivals, generally the monsoon quarter tends to be little weak and you are entering a phase where load factors will go up,” he said, adding that air tariffs were also showing some kind of strength. “These are the two factors, which are driving up space.”

Sugar: Sriram said he was positive on the sector, adding that the fair and remunerative price (FRP) the nation introduced recently was a plus for the long term. “It brings down the impact of the vagaries of local state level regulations on the space.”