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Weekly Dossier | Andrew Holland, Gautam Shah, Dinshaw Irani and others on markets, pockets of opportunities

On March 26, the market did rebound but analysts say it is too early to see it as a trend reversal.

March 27, 2021 / 09:34 AM IST
Representative image | Source: Pixabay

Representative image | Source: Pixabay

The recent surge in COVID-19 cases kept equities under pressure in the week gone by as investors booked profit at every rise. It appears that the market is struggling to break free from the bearish grip and a lack of positive triggers is keeping it low.

On March 27, the market did rebound but analysts say it is too early to see it as a trend reversal. "This should not be considered as a reversal in the trend. The markets might be taking a breather. The short-medium trend will turn positive only post-closure of 14,750-14,800. Until then any rally up can be assessed to go short on the Nifty," said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.

The Sensex fell 1.70 percent and the Nifty retreated 1.61 percent for the week ended March 26.

Here is what top Dalal Street experts have to say on the market and pockets of opportunities:

Andrew Holland, CEO of Avendus Alternate Strategies (to CNBC-TV18)

The markets have fallen globally. The next few weeks will tell us the direction. The race now is between coronavirus cases and the vaccination taking place.

We expect economy-facing stocks such as banks, energy, industrials and consumer discretionary to remain the favourites from a medium to longer-term perspective.

Gautam Shah, Founder & Chief Strategist, Goldilocks Premium Research (to CNBC-TV18)

This market has corrected after a phase of distribution. In the past whenever the Nifty corrected, it fell, tested supports, came back strongly and made new highs. That pattern has not been seen in the last two to two-and-a-half weeks.

At this point in time, there are no signs of bottoming outs, so while there could be pullbacks time-to-time, I do not think they will sustain.

Stocks in the banking space, autos and capital goods are on the weaker side and there could be some opportunities on the short side. However, on the buy side, we are more concerned about the defensives. IT, pharma and FMCG could standout and probably the places where investors can hide.

Dinshaw Irani, CIO, Helios India (to CNBC-TV18)

You look for reasons to explain a correction but I think it is mainly year-end driven because March is really important for mutual funds. I think that is playing out and there is nothing that will unnerve us.

For COVID, I think we are well-prepared for it. Some sectors such as organised retail may suffer.

The rally that one saw in PSU companies was because of the build-up of expectations that privatisation is around the corner and there would be a lot of value unlocking happening.

In the case of BPCL, the stock has run up and there is still no privatisation happening here. So there is a lot of hope built in there but we believe that PSUs will suffer at the hand of the private sector because they are not as well managed as compared to a private sector company.

Atul Suri, Market veteran (to CNBC-TV18)

After a 100 percent move over a year, if we see a 10-12 percent kind of correction, it is good, healthy.

It won’t bother me if we do not violate the pre-Budget lows. In case, in spite of such a path-breaking Budget, if we revisit those places or go below that, then I would be worried.

We are using this correction to accumulate and get into specialty chemicals. Specialty chemicals are something that we will consolidate our current position.

The other area which we are seeing going up is the home-improvement area. We feel that a lot of these stocks are showing very impressive quarterly numbers, very good turnaround and also the price behaviour that we are focusing on or the patterns that we look for in markets are very visible. So, we will consolidate in specialty chemicals and we will be adding home improvement-related stocks to our portfolio.

Amit Shah, Head of Equity Research, BNP Paribas India (to CNBC-TV18)

Private banks make a very strong case for themselves because you see improving NIMs as well as lower credit costs. The overall restructured book is less than 100 basis points for the large banks. So private banks remain a great place to be in.

The next sector is IT —the deal wins kind of leads us to believe that the sector will perform well in terms of revenue growth once again for FY22 and the recovery would be largely led by America.

We believe that the passenger vehicle space, as well as the CV cycle, should continue to remain strong but two-wheeler space is something that we would like to avoid.

Disclaimer: The above report is compiled from information available on CNBC-TV18. Moneycontrol advises users to check with certified experts before taking any investment decisions.

Moneycontrol News
first published: Mar 27, 2021 09:34 am