Nifty to remain in 8.5k-9k range; like infra: P Lilladher

Reema: What explains this acute selling pressure that we are seeing? The Nifty is down to the levels of 8750 and do you fear lower levels for the Nifty now?

Vora: The way we are positioned now in terms of our levels of indices and stocks where earnings need to take time to catch up and there is no short-term booster dose which has come from any of the actions of the government or Budget. So we will for the time being remain vulnerable to each global event. Currently for example strengthening of dollar and re-emergence of the expectations of interest rate hike in the US gradually maybe or a little earlier than what market was expecting is spooking the investor mood over here but our opinion is in and around this 9000 range markets will have to spend probably a little more time, consolidate time-wise if not by way of a large correction. So we feel 8500-9200 would be the kind of range in which markets will continue for quite some time.

Nigel: So, will you be looking at buying at around that 8,500-8,600 odd mark and which stocks in particular will you be looking to buy, which sectors at least because the bank Nifty as well as the IT index, both of them are down two-two and a half percent to around three percent as we speak and that is where the Nifty is not able to recover so, if we get that dip down towards that 8,500-8,600, what will you be looking to buy?

Vora: We are still as a theme first looking at the infrastructure side with the fact that we feel the stocks move with rising order book and order inflow outlook looks this year much better than last year so, that is one thing which we are playing so Larsen and Toubro continues to be one of our preferred stock in correction and also the sector and segment. The other one which we would still continue to like is the tech segment where we feel that with any development on dollar firming, interest rate further going up and if rupee weakens a bit, to some extent their cross currency problems will be mitigated, at the same time the demand outlook continues to remain strong. So, IT also will be part of the preferred ones and Tata Consultancy Services (TCS) continues to be looking good to us in the large cap and KPIT Technologies in midcap.

I am pretty sure at the right time we would like selectively some of the Non Banking Financial Company (NBFC) like Housing Development Finance Corporation (HDFC) or one of the banks also in the orders in which I was explaining.

Sumaira: What is your sense of what is taking place right now? Is it routine profit booking or do you think there could be still lower levels in stocks?

Choksey: If we look at two main areas where the pressure is coming from one is from banks and second is from IT. IT is understood more because Tata Consultancy Services (TCS) has lowered the guidance and that is where people have started unwinding the long positions and the portfolios. As a result of which the pressure on IT is justified to an extent I would not say fully but to an extent.

On the other side, banks are under pressure largely because of the reflection on bond yield. If you look at the bond yield it explains all because of that the possible impact of the mark to market gains which were expected after the rate cut, while to come and the banks balance sheet is not seeing happening and that is one of the reason. It could be a factor of March where in the yield may not immediately show the positive traction after the rate cut and that is where the market is some what giving up on the banks.These are few reasons for which markets are probably finding pressure.

I do not see anything fundamentally going wrong somewhere so I am not worried too much on that aspect. This may be more of an adjustment factor as I was calling. Last but not the least in the month of March generally the investors would have a tendency to unwind their positions and long portfolios particular in the forward market or derivative market and that is where some amount of pressure is justified if the market is giving one. Market is consolidating between 8,700-9,200 so closure to 8,700 I do expect that there should be some support coming in this point of time.

Nigel: Suppose someone is sitting on a short position do you advise him to close up his short position and take home some profits or do you expect it to move towards that 8,700. If someone is being lucky they have a short positions there and they have some puts would you tell them to pack up because we have seen numerous times when the Nifty gets up and going from around that 8,600 -8,700 odd mark. It does a good 200 -150 point bounce?

Choksey: In a bullish market sentiment generally it is advisable that whenever you get a chance to get profits out of your short positions you should book it and this could be one of the chance which one may have got it. I am not too sure how much further one can hold on to short positions but I would certainly believe that if the profit is coming along, take profit home - that is the best way to play this market.