May 10, 2013, 02.12 PM IST | Source: CNBC-TV18

Emkay Global sees Nifty in 5900-6100; picks 7 midcap bets

After Indian market rallying high in the past couple of trading sessions, Sandeep Singal of Emkay Global feels the midcaps will keep the Nifty in the range of 5900-6100. He feels there are no real triggers that can break the 6100 range of the market.

The Indian market has been rallying in the past couple of trading sessions due to increased foreign inflows. The Nifty has rallied more than 500 points in span of last four weeks.

Sandeep Singal of Emkay Global Financial Services sees the Nifty hovering in 5900-6100 range going ahead. However, given the lack of key triggers on global and domestic front, crossing 6100 level may be difficult.

Also Read: Sell only if Nifty corrects below 6025: Aditya Birla Money

“Most of the smart money in the world is going towards developed markets than emerging market and that is evident by the way we see S&P and Dow Jones breaking the new highs and Nikkei making five year kind of a high. We are getting our share of money but that is not enough to break the steam and take the index to the new high,” he told CNBC-TV18.

Meanwhile, Singal is bullish on Federal Bank , Motherson Sumi , Glenmark , Wockhardt , Havells , Amara Raja Batteries  and Madras Cement  from the midcap space.

Below is the verbatim transcript of Sandeep Singal’s interview on CNBC-TV18

Q: The market is still holding above 6,000 level. It has been about 500 plus point rally in a span of one month. What is the call now on the Nifty?

A: Our research analyst studied such market moves in the history and made an attempt to draw some correlation. Whenever there is such a brisk move in the Nifty which is about 8 to 10 percent in our case in 15 sessions Nifty has moved from around 5,477 to 6,000 plus, about 15 percent. There were earlier two instances - one from January ‘12 to March ’12 and another from September ’12 to January ’13. In both the instances, the Nifty ran 10 percent above.

The midcap index gave a return of 25 percent plus. That is exactly what we are expecting this time as well that given this run-up we expect broader markets to remain in a 200 Nifty point range maybe about 5900 to 6100. That is where we are recommending buying our preferred picks of Federal Bank, Motherson Sumi, Glenmark, Wockhardt, Havells. Amara Raja Batteries, Madras Cement one can generate alpha return in the portfolio.

Q: Why are you not expecting the market to breach the 6,100 mark? Today’s index of Industrial production (IIP) number was mildly positive . There have been some rate cuts by some banks Punjab National Bank said yesterday that they will cut and today IDBI has actually cut don’t you think the market has a chance of breaking 6,100?

A: Most of the smart money in the world is going towards developed markets than emerging market and that is evident by the way we see S&P and Dow Jones breaking the new highs and Nikkei making five year kind of a high. So, most of the smart money is moving there. We are getting our share of money but our sense is not enough to break the steam and take the index to the new high and that is one reason.

Second, most of the positive that one could expect has already been planned out in terms of reform taking place. Reforms like price cut in petrol, price cut in diesel, government announcing their foreign direct investment (FDI), some other reforms and now Reserve bank of India cutting rates two times all these did not excite investors to take the index beyond its high. Then we need to see what positives to expect so that the investors would take the index to new high. I can’t see any except that everyone would get surprised by the earnings growth of corporate India and they would beat all the analyst estimates. Then yes, it is possible. We are always positive about that but does not look that feasible at this juncture.

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Federal Bank Motherson Sumi Glenmark
Wockhardt Havells India Amara Raja Batt
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