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Sep 04, 2012, 08.46 PM IST
Sudarshan Sukhani, s2analytics.com and Anand Tandon, CEO, JRG Securities explain to CNBC-TV18 the behaviour of the market, the possible direction that it maybe headed and the various stock-segments that the investors may focus on.
Sudarshan Sukhani of s2analytics.com and Anand Tandon, CEO, JRG Securities explain to CNBC-TV18 the behaviour of the market, the possible direction that it maybe headed and the various stock-segments that the investors may focus on.
Sudarshan Sukhani analyses if the market, perhaps at least in the short term, has put in a base at levels of about 5,250. "I wouldn’t call it a base but it seems they have reached a short-term low of around 5,250. The idea was that if the markets cross the morning’s high, we would close our short positions and go long. The highs were at 5,253, but there was a little jump in the index, so short positions closed at around 5,260 and we are long with small volumes. All the short ones were in small volumes. And the market has turned choppy. Currently, my view is that some more uptrend or upside is possible."
Below is an edited transcript of the analysis on CNBC-TV18.
Q: How do you see the same situation pan out the market caught in a range-bound movement with no indications of direction?
Anand Tandon: Yes, the market has been in a range, but it is only 100 points. So, to some extent, the market is somewhat tradable. I still believe that the bias will be on the upside. Investors may find that the markets are again headed up for the next few days before it comes back again.
Q: What is the call on the entire power segment and individual power stocks?
Anand Tandon: Ultimately, it is a utility sector. So it is not something that can be seen as exciting. Apart from that, I think some of the stocks have come off a reasonable amount and is definitely one of the areas where investors can be slightly overweight at this stage.
Q: What kind of policy reforms do you expect from the government after September 7? Is there any expectation of a hike in diesel prices?
A: In short, there is no expectation. But I don’t know why the markets are so focused on the hike in diesel prices. I would look for areas where the government can cut expenditure rather than try and find more ways of taxing people.
But the bottomline is that there is a lot of pressure on the fisc which can be reduce either by taxing the consumer or focus on means to reduce costs and that’s what I’d like to see happen.
Q: You spoke about having a positive bias to the market. Would you set your sights at 5,400 on the Nifty or do you think we can even scale heights further than 5,400?
Anand Tandon: I don’t think that are such sacrosanct levels. I think the markets can easily go higher than that. The only question is the timeframe. My prognosis is that though it might not happen in the next two-to-three months, it may happen by the end of the year. To some extent it is predicated on the rest of the world remaining stable.
Anand Tandon: To some extent, the markets have already corrected in terms of stock prices as well. So I don’t think that I would worry too much. A bit of a slowdown is to be expected given the higher interest rate, but frankly, one segment of the market that is least likely to be affected, is the two wheeler-segment.
So I am reasonably certain that a blip like this will not last for too long. The penetration of two-wheelers is increasing in the country. It’s not the same market that it was five years ago. But I don't see a major structural problem for the next few years at least, so I would still say if you have to be in the auto sector, that’s probably one of the better places to be.
Q: What are your thoughts on the sugar sector and the possibility of complete deregulation?
Anand Tandon: Deregulation is largely the removal of levy obligation on sugar. But it’s tough estimate if it will be implemented. Theoretically it should happen. Most sectors should be out of the ambit of the government, but given the fact that it’s a commodity which is consumed by a large number of people, I don’t think it will be implemented in a hurry.
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