Mkt to stay choppy, pick & choose; Bet on CIL, M&M: Experts

Sukhani adds, "For the short-term trader, there is nothing to trade in. The markets were expected to be choppy since Monday As far as today is concerned, the only trade is in the Bank-Nifty which can be bought into at this current dip. But stay away from the Nifty."

Meanwhile Prabhudas Lilladher, joint MD, Dilip Bhat, in his fundamental analysis of the market, adds that it will still remain a pick-and-choose market for some more time to come. "Investors will probably have to keep on reshuffling and rotating portfolios to make any reasonable money in the long run."

Below is an edited transcript of  Dilip Bhat’s fundamental analysis of the market on CNBC-TV18.

Q: Do you believe that this current market move up until the 5,600-level is sustainable? Or do you think that there could be a big hurdle?

A: With way the reforms were really announced, there was a bit of optimism that the index could possibly test the 5,800-levels and based on further reforms, it could go right up to 6,000 and beyond. Probably, that was what a lot of people were talking about.

Given the state in which we are at the moment, even if one were to assume that these reforms would go through and the government survives, the call would still be that probably these were the last big-bang reforms to correct the fiscal deficit in particular. I don't think one can expect anything beyond that.

Given the way the RBI has observed on inflation, the way the economy is going and even about the international scenario, one doesn’t get too much of confidence that on the fundamental side the economy can really grow beyond 6-6.5%. It would be very difficult to justify levels beyond 5,800 and 5,900.

Probably these reforms have given a perceptively slightly higher bottom, but I am not too sure about that. At the same time, I am still very circumspect and apprehensive. I think markets would look for correction because there are not too many stocks that you can root for if the market starts to go beyond current levels.

Q: Do you think reforms will be implemented in their original form?

A: Even if the reforms go through, I hope that the UPA finds somebody else to support them. However, it is important to note that it will be difficult to announce such reforms without facing fear from a gamut of problems including a downgrade.

Q: The mood has clearly improved in the last one week or so. Which would be your highest conviction bets in the Nifty to capitalise on the improvement in the sentiment?

A: Coal India certainly remains a top pick because in the coming years we do see that the volumes will pick up. Overall valuation parameters still remain very much within the reasonable zone at the moment. So Coal India still continues to look pretty good. Ranbaxy looks interesting at the current levels.

Dr Reddys has corrected very significantly and on the banking front, I would still go for a stock like SBI , which looks a lot better than private banks which have had a good run up.