He sees an increase in issuance from the primary markets. "We are going to see multiple issues in a fortnight or in a month. The size of the issue will also get bigger as some of the public sector undertakings (PSUs) in the pipeline or some of the larger companies in the pipeline get ready to tap the market."
Amarnath feels this will result in India being on the top of everyone’s radar. "There would be a kind of follow through effect to the secondary market as well. You would have greater volatility in terms of sell-offs and as valuations come down, there would be a bit of re-stocking and subsequent buying as well."
According to him, the overall allocations towards India should be reasonably positive. "Though, in the next two months the allocations would be largely taken away by the primary market. Overall, allocations - primary plus secondary - would be lower than what we saw in the last 3-4 months. There is going to be some decline, maybe not more than 20-25% primarily because the macroeconomic signals in the US and even in Europe are tending to be more positive than expected. We could see some bit of a capital remaining there rather than getting reallocated to emerging markets."
Deven Choksey of KR Choksey Securities feels the market to bounce off and probably go above 4,700 would really require big amount of triggers. "The possible triggers in September are: A) the end of the monsoon season, if the deficit gap probably narrow down then possibly markets would look up. B) Outcome of the Reliance’s case possibly would once again allow the investors to look at the leaders favourably. C) The amount of money which would flow into this country in subsequent period through initial public offerings and otherwise would once again bring in liquidity."
He sees the markets trading rangebound. "We would probably remain in the range of 4,400 on the downside and somewhere around 4,660 on the upside. This range at the upper end of the band probably would see some amount of profit booking coming in. At the lower end of the band, probably investors would once again get into and start buying into the market."
On trade next week:
Choksey sees the Nifty going to 4470 or 4400 next week. "Next week again the cues are not going to be different. We still have lack of triggers as far as the upside is concerned. Next week is going to be a week in which probably we are going to see a fall, and may be by the middle of the next week, whatever the fall level is either 4470 or little below that to 4400, we should see the support buying emerging. From such a level, once again you should see a corrective upside in market afterwards."
Sectoral strategies/stock picks:
Centrum Capital's Amarnath advises investors to stay underweight on the commodity space, barring energy. "Though you are seeing the bottoming out of the kind of devastation in the Western economies etc, you are not going to see a pick up in consumption because it is going to be jobless stabilization and then possibly a phase of jobless growth, in terms of the economy beginning to recover. Only then you are going to see job creation coming back again which is several quarters away."
On the IT space, he says, "Decisions being taken by customers on order wins for IT companies will be the next driver. Those would be the positive signals in terms of the growth trajectory possibly accelerating a bit. "
Deepak Mohoni of trendwatchindia advises investors to stick to individual stocks. He is bullish on ONGC. "ONGC is the kind of stock which makes step wise upwards moves. It tends to go in a range for a while and steps into a new level. It’s continuing on its long-term uptrend, and doesn’t decline very much. It is a good portfolio stock as it cushions the portfolio during declines and continues to give good returns also."
Choksey feels investors can look at public sector bank stocks at the lower end of the band. "State Bank of India is on my radar. The stock is right now quoting closer to Rs 1,800. May be one may want to get into this stock whenever it starts getting available below Rs 1,700 levels."
According to him, one will get quality stocks at lower levels when you want to buy. "At higher levels, one would have to play very selectively. "One has to book some amount of profit in some of the companies where the valuations go high."
For traders, he advises Reliance from the frontliners. "Around Rs 1,900 is always a good buy as far as Reliance is concerned." Capital goods stocks, he added, are probably offering good trading opportunity at higher levels. "If you sell at higher levels, they would definitely give you the price at lower levels to trade in this market."
Source: moneycontrol.com (For content thanks to moneycontrol.com - good site for india stock market news & views)