The market's valuations have turned higher than long-period average and investors should be cautious and selective in picking stocks, say experts .
Axis Securities added ITC and CCL products in its list of top picks as it sees value buying and small cap allocation increasing, while the brokerage dropped Aarti Industries and Escorts from its list.
As fundamentals will take time to turn positive, investors should stick to quality largecaps rather than midcaps or smallcaps.
Largecaps or sector leaders are the safest bet during a crisis because the recovery momentum generally reflects first in these stocks, say experts.
Consumers seem to be putting off purchases because of low liquidity in the market. Outlook for the sector, in my opinion, remains muted and moderate.
Prime Minister, Narendra Modi said the package will focus on four factors - Liquidity, Land, Labour and Laws.
In the very near term, after the recent sharp rally, some consolidation or small retracement as mean reversion is highly probable.
Once India VIX settles below 70 levels, there will be a decline in volatility. On April 8, India VIX, after hitting intraday low of 46.97, witnessed a sharp rally of almost 10 percent from the day’s low point.
We recommend buying ITC Limited (ITC) around Rs 165-160 levels with a stop loss of Rs 145 for higher targets of Rs 199.
Mitesh Thakkar of miteshthakkar.com recommends selling Bharat Forge with a stop loss of Rs 376 for target of Rs 350 and Britannia Industries with a stop loss of Rs 2840 for target of Rs 2720.
Monetary Policy Committee (MPC) of Reserve Bank of India (RBI) has kept the repo rate under the liquidity adjustment facility (LAF) unchanged at 5.15 percent.
Mitesh Thakkar of miteshthakkar.com recommends buying BPCL with a stop loss of Rs 470 for target of Rs 500 and Larsen & Toubro with a stop loss of Rs 1330 for target of Rs 1380.
Most brokerages feel 2020 could be the year for broader markets to do well
Consumer sales growth has slowed over the past five years, but earnings growth remained healthy aided by benign raw material costs and reduction in indirect and direct tax burden, BNP has said
Mitesh Thakkar of miteshthakkar.com advises selling ITC with a stop loss of Rs 239 and target of Rs 226.
Sudarshan Sukhani of s2analytics.com advises buying Asian Paint with stop loss at Rs 1,760 and target of Rs 1,820.
Ashwani Gujral of ashwanigujral.com recommends buying Tata Elxsi with a stop loss of Rs 860, target of Rs 895 and Muthoot Finance with a stop loss of Rs 690, target of Rs 715.
Mitesh Thakkar of Miteshthakkar.com advises selling Power Grid with stop loss at Rs 196.5 and target of Rs 188.
Ashwani Gujral of ashwanigujral.com suggests buying JSPL with stop loss at Rs 119 and target of Rs 130.
Given current market sentiment and high perceived risk towards corporate governance issues, it is best to avoid poorly governed mid and smallcap companies with question marks on their financials, Rusmik Oza advised.
Brokerage firms maintain their rating on ITC, while Emkay Global has raised the target price to Rs 274 from Rs 267. The most aggressive target price of Rs 376 has been put out by Macquarie.
BSE Smallcap index declined 9 percent, BSE Midcap index down 2 percent, while BSE largecap index added 10 percent in last one year.
Experts feel that economic activity is likely to remain muted and investors will be better off with companies that are likely to benefit the most from the corporate tax cut.
Experts feel Diwali 2019 to Diwali 2020 period could be an exciting phase for the markets, expecting the market to return 15-25 percent.
Use add on dips strategy from henceforth as experts feel bull run has begun with the solid rally seen in second half of September.