Markets have got a big whack today on the back of heavy sell off in the global markets; the Sensex lost more than 600 points in the morning trade and tried to recover back in the afternoon trade but fell circumspect to selling pressure. Today  the Sensex ended the day at 12,938.09, down 540.74 points or 4.01% from its previous close of 13,478.83. This is today’s story, but what about tomorrow, where the markets will open, at what point, will the gap open on the higher side or lower side? Big question... but we need to wait till tomorrow for the answer.

Analysts are expecting that the negative trend will remain in the markets and that a further fall would be an opportunity for the investors to buy with a 12-month horizon.

Earnings season will bring confidence

Amit Dalal of Amit Nalin Securities said, “Hopefully it will be a little higher than today because whatever margin calls had to be done, whatever cleaning had to be done is perhaps in the last 15-20 minutes. We saw it happen but this is going to remain lack luster for a while. There is no confidence; it will take a while before the earnings season brings perhaps some remote interest coming back. We perhaps should go on a vacation for a week.”

Restrained merchant bankers

Primary paper was anyway coming at a mispriced offering. So if it gets damaged it is good for the market and I don’t think any market got destroyed because of the traders or speculators or anybody else. But it got often than not destroyed by merchant bankers so if they are restrained I would be very happy, said Market Expert, Gul Teckchandani.

Interest rate remains concern

Anand Tandon of Gryffon Investment Advisors said, “It is always difficult to take a call on the Sensex but if you ask me you would find that a few of the companies you would have been buying would have come back to levels where you might want to start putting some more cash back in. So on a bottom up basis I am sure there are investment opportunities. As a trend I still remain concerned on interest rate. I have been saying that for a while, till we get the interest rate down again you have a problem with the growth.”

Look at frontline stocks if Sensex comes at around 12,500

“This Rs 10 hike per bag in cement prices obviously is going to passed on, I think the demand for cement is pretty strong and the companies have come down to very compelling valuations. Just an example, Madras Cement is quoting today at about nine times the FY08 earnings. It is quoting at about 8.5-9 times, so I think valuations are looking compelling at this level but still I would be a bit away from these stocks, maybe we could see another 5% kind of correction. We could see the Sensex coming down to about 12,500, at that point of time, I may look at frontline stocks”, said Rajen Shah of Angel Broking.

Valuations good for long term

DD Rathi told, “For a long-term, the valuations are good because the story has not changed, I think what has happened today starting with the global impact and then the Budget and then the cascading effect when you have the market going down, margin calls are there. So I think this is more of that and if the global market continues to bet for a while, markets may look like the same. But I see good opportunities between 12,500 and 13,000 to buy and particularly cement stocks are bullish. I think they will do well, so this is the time to look at the opportunities. One should not look for the lowest levels to come, these levels are good and personally I believe that what government has done is not really right to do this sort of differential excise duties but it would work in a market where the demand is greater, this additional excise duty will get passed by.”  

Buy stocks from six-twelve months horizon

Kashyap Pujara of Sushil Finance said that the way we have closed today at the bottom, we could see some amount of pressures coming as far as people who are leveraged in the F&O side, so that margin calls will definitely come up. As long as they are able to manage margins, it is good but otherwise there could be some more pressure, which might come in. In the early hours tomorrow and probably from thereon I think markets will appear extremely oversold and we could see a short-term bounce back and our call especially on the markets are 12,600 on the Sensex and 3600 on the Nifty. We are feeling very compelling to go ahead and buy stocks from six-twelve months horizon, so clearly it’s buy on dips.” 

Markets likely to be weak for next 3-4 weeks

Ambareesh Baliga of Karvy Stock Broking feels that the market is no doubt weak and it will continue like this for a while but surely it gives a chance to long term investors like us to actually enter the market. Do some cherry picking at these levels possibly at lower levels. Atleast the next 3-4 weeks, it is going to be like this. It is a good time for people like us.  

Market should continue to trade sideways for sometime

Sandeep Bhatia, Head of Research, UBS feels that the market should continue to trade sideways for sometime. I think what is happening outside India is probably going to be more relevant; it is impossible to call what the global markets are going to do. Valuations even in Asia are now coming too much more reasonable levels, we had been cautious on India on Asia basis as the market was moving up.

I think in the near term I would expect the market to be sideways; the earrings triggers are there in the market, the valuation triggers which was not there is now there and memories are always short, we all know that. So to the extent that the earning season will be soon round the corner, end of March and people will be focusing on earnings and this will basically be very easily forgotten and market should then react to the triggers from the earnings season, he said.