Mkts to trade sideways, buy realty, banks on dips: Experts

Excerpts from Closing Bell on CNBC-TV18 Watch the full show » RELATED NEWS Markets bottoming out for now, start buying: Experts 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?

It was another down day for markets. They opened up soft, then saw some strength mid-way but gave into profit booking in late trade. The Nifty could not hold 5,000 again and slipped 26 points to close at 4,970. The Sensex shaved off 70 points, to close at 16,740.

The realty index got hit the most today. Unitech and DLF are down 6%. Also, the market punished stocks like Punj Lloyd, which slumped 15% on poor Q2 numbers, and Dena Bank, which lost 8% after dismal results.

The market breadth shaped up very poorly in favour of declines at 2:5. Volumes for the day ended at 1,05000 crore.

Markets to trade sideways:

Technical Analyst Ashwani Gujral says the Nifty has got into a narrow now between 4,960 and 5,030. "This narrow range comes after several days of decline. Inspite of individual tragedies, the market seems to be not holding up at lower levels which is good news. This means some sort of support is coming at lower levels. We could probably hold on to 5,000 inspite of Reliance cracking below 2,060. There will be good news in a sideways kind of fashion. A lot of stocks are correcting and getting ready for the next move."

Jitendra Sriram, Vice-President and Fund Manager-Equities, HSBC, says a pullback is possible If earnings dissapoint. "There has been a lot of dilution. At an EPS level, clearly you are seeing the impact of the dilution as well on stock prices. That is also causing some amount of correction in the market place. It will be overall healthy for the markets. So instead of having a unilateral move, there is a small pullback and then markets consolidate around these levels."

He was quick to add that there won't be a big correction under the current circumstances unless something goes wrong at a global level. "There is huge liquidity out there and money continues to come in across all asset classes. It is a right stage for the market to consolidate now at such valuations. Once the consolidation is over, you might see the market then looking forward to direction from hereon. Depending on what are the various global cues are whether it is some tightening of monetary policy or expectations of such things, it will drive market direction from hereon."

Infrastructure: Check earnings

Sriram says infrastructure stocks have seen a massive leg up in terms of valuations. "Any kind of earnings disappointment, which comes through, has a two-fold impact. There is not only an earnings downgrade but also a concern on derating of the sector itself. Those worries are coming back as stocks have run up ahead of fundamentals, and this is true for the entire sector. So, one bad result and people will not tend to extrapolate. But if you have a sequence of bad results coming from a sector which are slightly below expectations, sector optimists will tone down their growth expectations."

Buy realty on dips:

Gujral advises investors to buy realty stocks at lower levels. "They are going through the usual corrective process that all infra stocks are going through. As long as we hold 4,900, we should assume that some stocks will correct more, others will correct less, and this process will get over. Finally, we will see buying at lower levels."

Banking on banks:

Gujral feels results are just becoming reasons for a correction in banking stocks. "At lower levels, people will come back to these banks. The forth is getting off, but they are coming back to buying levels."