Jul 16, 2013, 12.11 AM | Source: CNBC-TV18
Market experts advise investors, on CNBC-TV18, to go long on the Nifty, avoid the Bank Nifty and bet on RIL and TCS.
Though Unitech is a complete no-no for most investors, Gopi Suvanam of Investworks offers his view on the stock for the for the short-term. "Taking a call on Unitech is tricky because it reacts to even slightest of news flow by 10-15 percent or because market is going up. Overall, I would go short on real estate and other stocks which are highly levered and which do not look good on valuations."
On the release of IIP, CPI inflation and WPI inflation data and its effect on the RBI policy scheduled to be announced at the end of July, Gopi Suvanam says that the RBI would not make any drastic changes in interest rates with inflation refusing to dip. "There could be some relief in terms of a reduction in the cash reserve ratio (CRR) or statutory liquidity ratio (SLR)."
Suvanam also highlights that positives such as the decision taken by developed economies to maintain low rates and the Fed's announcements that quantitative easing (QE) would continue for some more time come as a relief for the market.
As the earnings seasons kicks off, TTK Prestige declared weak results due to a contraction in margins and low profitability. Offering an overall view on quarterly corporate earnings, Gopi Suvanam points out to a trend of disparity. "Defensives like HUL , ITC , the pharma or technology sector could declare strong results while midcaps could declare poor earnings due to pressure on margins, a slump in revenues and the consistently high levels of inflation. The growth in consumption seen in 2012 probably may not continue in 2013."
Suvanam remains short on the auto space and the stock that he is most uncomfortable on is Tata Motors . "The manner in which the Jaguar Land Rover operations are being conducted is highly worrisome. On the whole, the auto sector is coping with a slowdown and low levels of consumption. Tata Motors also has lot of legacy problems regarding investments and the stock’s valuation is very expensive. This is one stock I would advise investors to go short on."
Offering an estimate on Tata Consultancy Services (TCS) and HCL Tech after Infosys ' declaration of earnings, Suvanam says that HCL Tech has priced in some of the moves that could come in during the result reason. "TCS is a stock that could perform well over the next few years and is a good long-term investment.”
On oil and gas stocks like Reliance and ONGC , Amit Dalal of Tata Investment Corporation says that Reliance is definitely a gainer from the government's gas pricing policy . "My view on Reliance is positive with the announcement of its three-year growth programme. Though it is tough to take a call on PSUs in the oil and gas sector, I have always remained more positive on the units involved in exploration rather than distribution."
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