Nifty to hold 4750, infra looks good: Dimensions Consulting

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Nifty to hold 4750, infra looks good: Dimensions Consulting

Indian market is getting moody. Experts feel that there will be more retail participation at correction.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » 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 Lanco Infratech BSE | NSE 01/06/12 Are Mutual Funds betting on Lanco Infratech? Other Stocks in this news Larsen and Toubro | Hindalco Industries | Sterlite Industries (India) | Mahindra and Mahindra | Bajaj Auto | Oil and Natural Gas Corporation | Bharat Heavy Electricals | Titan Industries | Jubilant Foodworks | Infrastructure Development Finance Company | HDFC Bank | Ballarpur Industries | Bharti Airtel |

Indian market is getting moody. Experts feel that there will be more retail participation at correction.

Ajay Srivastava, CEO, Dimensions Consulting feels that people want to get into equity market with the slightest of correction. In an interview to CNBC-TV18 Srivastava says, "I think by and large consensus, 4750 is a good place to take long positions so everybody will go long at 4750. It's not going to be easy to crack 4750 by nature of demand and supply, not necessarily fundamental factors."

He sees valuations attractive in the infra sector. Among the infra stocks, Srivastava prefers Lanco Infratech and L&T . According to him, Hindalco is better than Sterlite in the metals space.

Also read: Nifty may test 5200 but 5030 a key level for now, says Manghnani

Below is the edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying videos.

Q: Do you think we have a floor at 4,700 or are you seeing this just as a technical rally?

A: People, who want to get into equity markets, the moment they positive Dow Jones, next morning they are out to buy stocks.

The fundamentals tell us that India is perhaps the worst of the placed economies around the world right now. But the moment the screen is green, people want to buy the stocks. So, it's not about 4750, it's just that people want to get into equity market with the slightest of correction.

I think, by and large, consensus is that 4,750 is a good place to take long positions. So, everybody will go long at 4,750. It's not going to be easy to crack 4,750 by nature of demand and supply.

Q: Is there another big leg down waiting for the market or do you think we will just amble along in a trading range for the next few months?

A: I think everything depends on what happens overseas, although there maybe no major connection. If overseas stays firm, which we believe should be in a broad range, India will remain in a broad range.

India, by and large, is very under invested at this point of time. Till the 0% interest rate continues in the US, the exchange-traded funds (ETF) will keep coming and buying at every dips.

ETF will come into India and buy at every major dip. They may sell-off very fast after they make 10-15% profit. So, there is a kind of floor being built into emerging markets including India, where these funds come in and buy purely because the rate of interest in the US is almost zero. There is a floor both in terms of Indian underinvestment and in terms of ETFs coming in.

Beyond 4,700-4,600, I would call a big leg down. Up to 4,700, I think it's a par course for the day that it may happen anytime. If it happens, people will buy, and the market will recover back.

Q: How are you approaching the market with this trading kind of mindset yourself where you scalp gains when you get 10-12% quickly, but don't get into medium term investment positions now?

A: I think that's a very fundamental shift. I don't like it. But it's a big shift that has taken place. Earlier you used to hold positions for years, now it has gone down to weeks. It's like moving from sector to sector.

Consumer used to be a big thing for us. I think we have, by and large, sold off all the consumer items and advising to sell it off because the returns we expect will not be any substantial. I think they will be good defensives, but may not give substantial returns.

I think the time has come to look at more risky stocks- infrastructure sector- not necessary today, but somewhere down the line as the next downward leg happens or we see interest rates softening.

I think the time has come to start looking at this player, to start to seed in some kind of money there. The multiple returns that can come there are going to be pretty good, whenever it happens. It will happen, we know it. It's a question of timing.