Nifty may correct to 8600; like pharma, buy HDFC: Pros

Market expert, Anand Tandon feels there is every possibility of further downside in the market because there is no particular reason for the market to take off at the current juncture, especially since valuations have looked stretched for long now, the expectations from earnings season that is round the corner are getting downgraded all over again and the expectations from the Budget too are now behind us.At present, it is very tough to find value in the market other than outside the index, says Tandon.  So, if one has been in the market then it would be prudent to look at shorting opportunities than buying now. If one is an investor then he would have to extend his investing timeframe to at least three years, to get gains feels Tandon. According to him, the market currently looks extremely heavy.The Indian equity market in the afternoon trade had extended losses but by the end of trade on Tuesday recovered some of them. Sensex closed at around 28,709 and Nifty at 8712. Mithil Pradhan, Violet Arch Global Managers too believes there is further downside expected in the Nifty and it could even move towards levels of 8600-8450. However, there is no lower low as of now." The momentum on the monthly chart is a little overbought and on the sell side. The daily chart on the momentum side is overbought and even the weekly chart has given sell signal," he adds.Meanwhile, the first quarter of the calendar year has never been good for Indian equities, says Pradhan.

Speaking about stocks and sectors, Dilip Bhat of Prabhudas Lilladher says telecom is witnessing a relief rally on back of spectrum auction coming to an end. In the short-term there could be debt on the balance sheet of companies that have bid in the auction but over the longer term they would be able to pass on the prices. So, he does not see a downside for the sector.Bhat advices remaining invested in front line private banks than public sector banks although the fourth quarter could be a bit heavy for ICICI Bank, he adds. He strongly recommends buying HDFC on every dip for the medium to long-term because the core business would continue to deliver.Tandon thinks pharma is a good place to be in compared to even FMCG on back of sustained earnings growth visibility and strong pipeline. Moreover, if rupee becomes weaker then there would be further tailwinds for the sector, he thinks. He is not so upbeat on the metals because growth there is linked to economic growth but thinks one could look at cement because it is more of a domestic story.For Pradhan, Arvind has been a favourite stock and would buy it around Rs 300 levels, which is a good support for the stock.With regards to midcaps, Bhat says one can play safe and look at IT and some pharma stocks like MphasiS, KPIT, IPCA Labs, Marksans Pharma and Exide from the auto ancillary space.