Follow the market,don't take contrarian calls: Anand Tandon

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Hold midcap cement sector Tech Mahindra will be volatile: Tandon ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Bharti Telecom | Hindalco Industries | Parrys Sugar Industries | Classic Diamonds (India) | India Cements | Kesoram Industries | Mahanagar Telephone Nigam | Mangalam Cement | Reliance Industries | Titan Alloys | Su-raj Diamonds and Jewellery | Steel Authority of India | Tata Steel | Sterlite Technologies | Glenmark Pharma | Dalmia Bharat Sugar and Industries | Tata Communications | Gitanjali Gems | Reliance Communications | Tech Mahindra |

Anand Tandon of Gryffon Investment says that the market is showing a lot of strength, and this could be because of the economic scenario, which looks positive now. He advices to follow the market and not to take any contrarian call.

 

Excerpts from CNBC-TV18's exclusive interview with Anand Tandon:

 

Q: What do you expect to see? We have consolidated for the last seven days; do you expect to see another move soon?

A: The market is showing enormous strength. I'm not sure whether it is only on the basis of the fact that we are in the last week of the F&O expiry. Therefore the mood could turn after the expiry. It could even be on the basis of the fact that the economic scenario looks quite positive today.

At this stage I would just follow the market, I don't think it makes too much sense to try and take a kind of contrarian call right now.

Q: Tactically at 11,600 what do you do? Do you chase the market for higher returns or do you start taking some profits off the table?

A: That is a question of asset allocation. As I said, the only option one has, is to keep that portion of the assets, which you allocated to equities in the market. Would you take more money into this stage?

That's only if you find new themes to play. New themes do constantly emerge but they are not big themes, at least from where we sit. So just follow the trend. Some of the frontline companies like Reliance etc are showing enormous strength and are likely to lead the market up from here if at all.

Q: Your thoughts on Tech Mahindra. What should one be doing in that stock now?

A: That's the company which is going to make its space among the larger ones in the sector. Overall, the tech area, especially in the midcap looks quite interesting. But the analysts' estimates of Tech Mahindra are likely to go up.

There is perhaps some more room for the stock. But again the near term action would likely be determined by the IPO action, which has just happened. So for sometime I would expect volatility, after which I expect the stock to perhaps consolidate and go up from here.

Q: Do you track anything in the midcap pharma space? How have you read all these news flows that have been happening these past few days?

A: That space has been providing reasonable amount of returns over the last few weeks. Obviously, the purchase of this capacity by Mylan will trigger off perhaps a little more interest in that area because many companies have set up global scale plants.

So far I haven't been able to capitalize on them for a variety of reasons. The main one being that they are unable to penetrate the highly competitive markets in the regulated countries. So with this kind of JV that has happened, the distribution is strongly strengthened.

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