SENSEX NIFTY
Feb 07, 2013, 07.16 PM IST | Source: CNBC-TV18

Global markets flat; adopt stock specific approach

The market remains in a bit of a rut locally and globally, but lots of individual stock action is going in. Today market will be watching National Thermal Power Corporation (NTPC) offer for sale (OFS) and the Alok Industries rights issue.

The market remains in a bit of a rut locally and globally, but lots of individual stock action is going in. Today market will be watching National Thermal Power Corporation (NTPC) offer for sale (OFS) and the Alok Industries rights issue.

Lots of interesting results are lined up today like VIP, Bombay Dyeing, Aurobindo Pharma etc. So, one should focus on those individual names rather than looking at the Nifty because it is just not doing anything over the last few sessions, said. Udayan Mukherjee, managing editor, CNBC-TV18.

Below is the verbatim transcript of analysis

Europe is a problem and the noise level is picking up in Europe since last couple of days and that is emerging as a bit of a risk once again. One can’t say for sure that this is a phase of many weeks of European stress, but it is being talked about a lot.

There is a debate about the impact of a strong Euro is raging in the West. However, one could see that even yesterday despite the recovery in the United States (US) markets the European markets slipped from the highs of the day and closed quite weak. That remains a problem pocket.

The US market was down as well, but it pulled back from the lows of the day because of good earnings out there. From a global risk point of view, if one is mapping the possibility or the threat of a risk-off it is more likely to come out of the European region rather than the US.

The European markets are trading at two-month lows. However, two days will not usher risk-off in a global environment with this flush with so much liquidity. Things will need to get worse whether they will or not through February, one will find out. For now some disturbing signs are picking up in Europe, which the market needs to be cognizant of.

It is a capital raising season here and there have seen some of these phases in the past where a lot of supply hits the market suddenly and most of the interest is focused on getting those issues done. Even from global investors or large institutional investors the focus shifts from chasing a market, which has lost momentum to probably getting some allocation in, high-quality paper, which is coming in at reasonable prices. It is supply season in the market right now and therefore the Nifty is stuck, not going anywhere.

The best one can say for this market is that it is not assuming a lot of momentum on the downside as well, which is a bit of a relief because if it had broken down conclusively some of this money raising would have had to recoil as well. We started off by saying it is better to focus on individual stocks, but even there we are getting reactions of 5-7 percent every day depending on which way the newsflow is coming.

That’s a better pocket to be looking at because in individual pockets there are opportunities emerging because stocks are reacting very sharply to results or newsflow. There are selling opportunities, which are coming about as well because of very sharp rallies. One should keep his eye on individual stocks. For the Nifty trader or the Bank Nifty trader we are perilously close to the lower end of the trading range, but it is still not conclusive enough to go out and trade aggressively.

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