Mkt to be rangebound at 5400-5600 till budget: Angel Brkg

Phani Shekar of Angel Broking said he expects the market to be range bound between the 5400 and 5600 levels till the budget announcement. "This is one of the most important budgets in the last five years or so to determine the direction of the market." He added that this was the right time to accumulate fertilizer stocks.

Below is a verbatim transcript of Phani Sekhar's interview with CNBC-TV18's Latha Venkatesh and Soniya Shenoy. Also watch the accompanying video. Q: The manner in which the markets have recoiled and given up the gains today what is the sense it is giving you that before the weekend you will see more such activity of people rolling back even the limited longs? A: The market is likely to be range bound between 5400 and 5600 levels. In the near term, markets looks fairly valued at 5400 because the primary concern of the market off-late has been inflation and the deteriorating fiscal position. Until the budget you are likely to see market between 5400 and 5600 levels. The direction is going to depend on what the government strategy is and targets are for the fiscal deficit for next year. This is one of the most important budgets in the last five years or so to determine the direction of the market. Q: What are your take on Chambal Fertilizers? Also, what do you think of fertilizer space overall from the short-term perspective? A: It is difficult to take short-term call but this is the right time to start accumulating fertilizer stocks. The government is increasingly running out of options. In the wake of a high food prices in the last six months, the government may want to justify pushing relatively higher urea prices on the fact that farmers have made good money. They might be able to do so politically at least. Very shortly you are likely to see at least partial decontrol of urea and that is good news for fertilizer stocks. I would certainly recommend a hold and buy on declines in fertilizer stocks. Q: Do you suggest any other options in the broader markets, maybe, sugar or anything of that sort that will give better profits at this point? A: You need to have your diversification going through. Hence, I would not recommend that you go whole hog on all the fertilizer stocks. Chambal Fertilizers is a good stock representative of that universe that you can get. You can look at other commodities. Sugar, for longer term investors is relatively a good bet. One should not go overweight on fertilizer. Whenever you are playing on news flow events there is certain amount of risk and to that extent your exposure becomes very important.