Buy frontline banking stocks on dips: Dhawan

Excerpts from Closing Bell on CNBC-TV18 Watch the full show » Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

Buy frontline banking stocks on dips, says Sajiv Dhawan , JV Capital Services.

Dhawan told CNBC-TV18, "Generally bank as a sector we would look to buy the declines. This sector has got a lot of momentum, valuations relative to the market are reasonable, there is still a lot of possibility of mergers, which comes up from time to time, the government although seems keen, doesn't quite go through. But for us it remains a sector, which has given good results for our shareholders over the last one year. It remains a sector, which is getting more and more into focus, there is a huge choice of banking stocks, medium-risk, low-risk to suit all types of investors whether you like public sector undertaking (PSU) or private banks."

He further added, "Across the board obviously as a portfolio investor, you will pick the blue chips on any substantial decline and I think on days like today we see 3% fall; it is not too significant; I think these declines have been bought into to the fact a lot of people have been missed out. But if there was any correction in the market and the sector as a whole fell more than 5-10% for any reason, all things being equal with the fact that interest rate hike in the next six months or so has been factored in, I would use this as an opportunity to buy the frontline stocks again with a medium-term to longer-term outlook."