Capitulation by FIIs looks relatively low: Deutsche Eq

Here are expert equity calls for the day on how the markets are expected to trade:

Abhay Laijawala, Deutsche Equities: India will not remain immune to any global contagion in response to the S&P downgrade. But the possibility of a full blown capitulation by FIIs looks relatively low. We are increasing our underweight on metals and reducing weightage on IT services. The top picks include Asian Paints, Axis Bank, Bajaj Auto, Bharti, Coal India, DLF, HDFC Bank, ITC, L&T and M&M.

Markus Rosgen, Citigroup: Market valuations are indicative of trouble ahead. On a mid-cycle PE basis, global markets are at 15 times. The prior recession lows are around 12 times, indicating 18% downside. The US debt downgrade makes current account surplus countries with appreciating currencies more attractive. We are overweight Hong Kong, Korea and Taiwan & Underweight Australia and India.