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Oct 17, 2012, 01.41 PM IST
Ajay Srivastava, CEO, Dimensions Consulting believes the market performance is a consolidation and nothing more as not much has changed in the market.
Analysts are growing bullish on India as the economy is showing slight improvement in economy. Ajay Srivastava, CEO of Dimensions Consulting feels that the Nifty is likely to touch 6000 by the year end.
According to him, the market is likely to see more upside on festival euphoria. However, investors are likely to offload their positions by January.
"By the first or second week of January we should be offloading lot of our positions. We don’t want to make short positions right now unless market changes. So we remain bullish, we remain strong but come close to January, we move on post the festive fervour," he said in an interview to CNBC-TV18.
Srivastava does not recommend buying IT stocks but feels that among the peers, HCL Tech is the better one.
Below is the edited transcript of Srivastava’s interview with CNBC-TV18.
Q: What is your sense this pullback from 5800 is just consolidation or anything more significant than that?
A: It atleast looks to be at consolidation because nothing much has changed in the market. With positive vibes coming from the Finance Minister on deficit reduction, RBI should take a little more benevolent view given his commitment on fiscal deficit. So it looks to be in a good place at a good time. The only caveat for the market is that are we fairly pricing in the positives that is the key question.
If you look at the broad spectrum of companies, the valuations have kicked up very strongly in the last 30-45 days, much beyond the fair value in an intermediate period. So the question is do we have more upsides given what we expect or do we think we are at fair value. The answer is we are more or less in fair value of more stocks than not. Therefore if you tend to buy into this kind of market, you could end up in an 8-10 percent loss in a very quick time frame as in the last one week or so.
So the market is fairly valued. Deep cuts should not happen but whether to buy big in this market, I think that is questionable tactic.
Q: What kind of range do you expect for the market going ahead?
A: We are clearly expecting it to reach 6000. Sooner or later before the end of the year we are expecting 6000. There will be some amount of excitement on festival season, festival sale, etc. In the Q1 of January we will know how many sales translate into real retail sales, what the discount is going to be like and its net realization. We will end up in a kind of euphoria at the end of year and come back after the New Years and start to sell out.
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