Mkt in upward trend; time to book positions: Experts

Indian equity benchmarks saw a good start to the October series with both the Nifty and the Sensex ending the day with close to 1 percent gains. While the Nifty almost touched the 5700 mark, the Sensex closed at 18762.74 on Friday.

Throughout the trading session, the Nifty has been able to hold on to the psychologically important 5700 mark and Sudarshan Sukhani of s2analytics.com feels there is a position on the long side and the market is clearly witnessing an upward trend. He further added, "We are searching for entry points to add to our positions on Monday, Tuesday on a small dip."
After a slew of reforms from the government on the policy front, Dhirendra Tiwari, HoD of Antique Stock Broking believes it is time to get into the market and hope for significant improvement in demand outlook. "We are positive on the markets," said Tiwari.
 
Here is the edited transcript of the interview on CNBC-TV18. Q: Why an energy conference at this point of time and what has been the response that you have got from the investors for the same theme?
A: I think there are a few changes happening in the energy sector, in oil and power sectors. We are seeing significant improvement of outlook in these sectors.
Government has taken various steps which will improve the outlook for power as well as oil and gas sector. I think this is an opportune time to do a conference like this and there has been a tremendous interest amongst the investors for this. Q: Within the power sector, what would your top picks be because of late we have seen Tata Power, Power Grid as well holding up quite smartly in today's trade?
A: If you see the power sector, there have been a lot of problems in the past two-three years, primarily because of issues with State Electricity Boards (SEBs). SEBs were not getting funds because they have been incurring losses. There are two things, one the cost of power is very high and secondly the tariffs are low.
When both these come into play with SEBs, their financials get very bad. What we have seen in recent times is that about 18-19 SEBs have increased tariffs in last few months. At the same time, we have seen efforts by SEBs to cut down their input costs.
The impact of these things will be felt over a period of time and government has also come up with some kind of support for the SEBs. For example, you are aware of the debt restructuring of SEBs. SEBs do tend to initiate capital expenditure once they have liquidity and our view is that once the debt is restructured, which will take some time, the performance of these SEBs will improve. Therefore, they will also initiate capital expenditure to improve their losses, which is going to be a positive for the sector as a whole. Q: What about the markets, it has continued to move upwards, after that 6.5 percent rally last series we are back above 5,700 mark now, do you think we can hit new highs by the end of the year?
A: If you look at the market per se, market has held on for reasonably long period of time despite all negative concerns. My view is that if you look at performance in past 18 months, there have been two major concerns for the market, the policy logjam and the interest rates.
There are policy logjams because there have been very few reforms, very little improvement in expenditure, basically in the infrastructure sector. That has led to a significant concern in the market. The second concern has been the high interest rates.
As I would believe, there is a reversal on both these counts, there is apparently significant improvement as far as government functioning is concerned. We have seen FDI in retail, broadcast, airline. We have seen diesel prices going up which will lead to fiscal consolidation.
There is definitely action happening on the government front. We are of the view that probably interest rates are headed downwards over the next two years and I would argue that if these two were the concerns for the markets not going up, the reversal of these two will help sustain the markets.
Beyond that we will have to see earnings growth over next 3-4 quarters. My view is second quarter is not going to be great, maybe third quarter also. But beyond that there is a hope that some of these steps will kick-start demand and therefore, the markets to rerate. Our view is that, it is the time to get into the market and hope for a significant improvement in demand outlook. So we are positive on the markets.