SENSEX NIFTY
Mar 03, 2013, 07.47 PM IST | Source: CNBC-TV18

Budget Analysis: Market to drift lower, see Nifty at 5550-5600, says Baliga

Ambareesh Baliga, Independent Analyst, says that there were hardly any sentiment changes for the market from the Budget. He is of the view that the market will drift lower for next couple of weeks and the Nifty may move closer to 5550-5600 level in days to come. Going forward, only global cues will be seen as a trigger for any bounce back.

Ambareesh Baliga, Independent Analyst, says that there were hardly any sentiment changes for the market from the Budget . He is of the view that the market will drift lower for next couple of weeks and the Nifty may move closer to 5550-5600 level in days to come. Going forward, only global cues will be seen as a trigger for any bounce back. 

Also read: Macros good; use current dip to buy stocks: Morgan Stanley

Below is the edited transcript of his interview to CNBC-TV18.

Q: With a big trigger out of the way how would you approach the market now?

A: There were hardly any sentiment changes for the market from the Budget and after the midcap carnage we saw the market slipping below 5,800-5,840 level, which was a good support. I think the market will continue to drift down for next couple of weeks and if there is any bounce back it will be short term. International cues will only be seen as a trigger for any bounce back. I see the market to move closer to 5,550-5600 in next few weeks. 

Q: Is there any sectoral takeaways that you see post Budget or will we continue to be tracking global markets, hence the Budget is now a done and dusted event and will be forgotten?

A: It is better to be with safe havens like FMCG or IT as the market will remain weak going ahead. However, one can invest in OMCs such as HPCL and BPCL were a 20 percent cut is seen in last few days. I don't expect too much of downside going ahead for these stocks and these stocks may bounce back very well.

Q: In last one week we saw many many losers, PNB was down 8 percent, Tata Steel was down 7 percent, RIL was down, DLF etc, I do not know if this is a good cherry-picking opportunity because the Nifty is at a three-months low, are there any stocks from the heavyweights itself that you would advice with an investment horizon of six-twelve months?

A: Stocks like RIL , L&T , SBI and PNB can be picked up but not right now, because the market may further dip by 100 points. These stocks may correct another 3-4 percent and then these stocks can be picked up.

Q: What will be the next trigger for the markets now as most of the triggers have played out already, do you foresee a substantial correction in market and is there any trigger that could take it down going ahead?

A: We have already seen a substantial correction to a large extent. Midcaps fall gave an impression that as if the Nifty is closer to 3,500-3,800 and not at 5,600-5,700 levels. For Nifty, I don’t see more than 100-150 point correction. I think the Nifty will drift, tire out people and people will not be interested in investing in the market at least for a while. Reserve Bank of India (RBI) policy will be the next domestic trigger, there I see 25 bps cut based on the Budget.

Q: Is there any stock either in the frontliners or in the midcaps that you would want to advise as a buy now?

A: No, in fact I have already recommended OMCs, RIL, L&T in the frontline. However, among the midcaps, which have cracked in the past few days, I would recommend Bhagwati Banquets. They have a hotel in Surat which is worth about Rs 500-550 crore, they have a loan of Rs 120 crore on their balance sheet. At today’s price, the marketcap of the company is Rs 125 crore. I don’t expect any downside for the stock; I think this stock will give good return with a time horizon of one year.   

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