The stock market is on a roller-coaster ride with moves either way seen recently. Experts discuss the course ahead and give their views on stocks and sectors.

“The Indian market is looking at what happens in global markets, what is the kind of news flow we get, and with that is how India is going to move,” said Ajay Loganadan, Head, Investment Advisory Group, HSBC Private Banking.

He added that stock valuations did not look cheap at levels of Sensex at 17,000 on basis of forward earnings estimates and that a move beyond that would be both difficult and unhealthy currently. “The market may trade between 15,000 and 17,000 and every dip will be viewed as a buying opportunity given the cash that is waiting to be deployed in equity markets,” he said, adding that that would make the possibility of a deeper correction difficult.

Midcap stocks, which have been the flavour of the season, will continue to outperform in 2010, said Rajen Shah, CIO, Angel Broking. “If you’re a high-risk, high-return investor, then midcaps are the way to go,” he said. “Certain midcaps even at this point of time — when the Sensex is at about 16,500 levels offer excellent opportunities.

View on stocks/sectors

Educomp: “I would avoid Educomp,” Shah said. “In fact, I have recommended a sell on Educomp at Rs 4,000 levels. After that, it got split but even at this point of time I would certainly not recommend getting into Educomp.”

HOEC: “Few months back, we had given a strong ‘buy’ call on HOEC. We had called it the ONGC of the private sector and the call was that around Rs 65-70 levels. Even we were surprised by the pace of the rise in the stock. But at this point of time, it’s certainly not a buy.”

IFCI: Shah said IFCI was a trader’s delight. “Every time some news of divestment in the company comes up, the stock goes to Rs 85-90 levels and maybe when it doesn’t happen, it comes down to about Rs 30 levels and it has happening for the past couple of years,” he said. “This time the government seems to be serious, so maybe the stock could continue to be in action and limelight. But it’s not a stock for investment.”

Financials: Loganadan said he liked the banking stocks. “Actually we like the private sector banks more than pubic sector banks,” he said, adding that private banks traditionally traded at a premium to public banks but the difference was a lot less now. “Based on that right now we like the entire financial pack but overweight the private sector banks and neutral the public sector banks.”
Real estate: Loganadan is under-weight on the sector. “If you look at it selectively, we are seeing pockets of improvement. Some of them are able to raise some capital but the pain is still there and it could take a few quarters before we start to see true revival in demand,” he said. “However, if we look at very long-term story in real estate, it’s an attractive space to look at but it will take at least a quarter to get upgraded.”