Mkt correction healthy; focus on frontline stocks: Experts

The market took a sudden U-turn on Wednesday with the Nifty tested 8150 levels and the Sensex cracking 600 points.

Here is an outlook by experts going forward

Sanjay Dutt of Quantum Securities says the fall is nothing much to be perturbed about and could be termed as a healthy correction in a strong bull market.He does not expect Nifty to go below 7800-7900, which could pose as a reasonably strong bottom for the market and believes this correction gives an opportunity to enter into good quality stocks that have corrected 20-30 percent, stocks with strong balance sheets and growth outlook.Dutt is in favour of PSU bank stocks and capital goods stocks with an eye on economic recovery. The correction is more a fundamental issue because stocks had run up on back of expectation of better earnings and reforms from the government. However, now the entire landscape seems to have changed with earnings disappointing and reform process in a muddle.

Dilip Bhat of Prabhudas Lilladher clearly believes the way the market has sold off and confidence has shaken it is likely that the market will remain nervous going forward too. It is possible that Nifty could see sub-8000 levels and so any rise in the market should be used as an opportunity to book profits, he adds. So, it is time to take a pause and wait for things to pan out, at least till the earnings season is out, says Bhat. According to Bhat, the way the recovery has been tentative and not decisive one should only focus on frontline stocks. Larsen and Toubro is a good bet along with Axis Bank, HDFC Bank and Federal Bank. One can also look at some auto names, Maruti, Bajaj Auto from current levels. Jagdish Malkani, member  of BSE & NSE says there is always a news to justify a fall and today it could be rise in crude prices, which are trading at around USD 60 per barrel and USD 68 per barrel for WTI and Brent respectively. Oil has been the key pillar of the India story, he adds.  Moreover, FIIs too have been selling on a net basis and one has to see them turn back at least for 3-4 sessions in a row. The government too has failed on the MAT front and in terms of other reforms.Stock/sector specific, he believes bloodshed in PSU banks is likely to continue and he would not look at anything beyond Bank of Baroda in that space. There are also good quality private banks available, he adds.