The level of 31,200 should be seen as resistance and it may go down to 29,560, says Rohit Srivastava, Fund Manager - PMS, Sharekhan by BNP Paribas
The worst may not be over for the broader market and the ongoing NBFC crisis is only adding fuel to the fire in an already beaten down midcap segment, Rohit Srivastava, Fund Manager - PMS, Sharekhan by BNP Paribas, said in an interview with Moneycontrol’s Kshitij Anand.
Q. It has been a roller-coaster week for the Indian markets. We saw 40,000 on the Sensex and the biggest one-day fall in 2019. What is your advise to investors and traders? A choppy market till Budget? What are the big levels to watch out for in the coming week?
A. The Nifty50 is facing stiff resistance at the 12,140-12,180 range and is unlikely to get past that anytime soon.
The index may trade in the range of 11,800-12,140 for the coming days with greater odds of a breakdown on the back of weak global markets.
Expectations from the Union Budget have reduced significantly after the Reserve Bank of India (RBI)'s failure to enthuse the market.
Q. More than 100 stocks have hit a 52-week low on Friday? It looks like with lingering growth concerns and NBFC crisis, concerns over the mid and smallcap space is far from over. What are your views?
A. The midcap cycle of underperformance usually goes on for 2 to 2-and-a-half years. So far we are a 1-and-a-half year into a downturn for Midcaps.
The worst may not be over for the segment. The NBFC crisis is only adding fuel to the fire in an already beaten down midcap segment
Q. What should investors do with NBFCs stocks? Should they switch over to private banks?
While a switch maybe relatively beneficial private banks that have outperformed NBFCs are also richly priced. So switching is not always a good strategy.
Q. What is your advise in Nifty Bank for the coming week?
A. The risk-to-reward in Bank Nifty is skewed to the downside. We would approach the market from the short side. The level of 31,200 should be seen as resistance and it may go down to 29,560.
Q. Any sector which is looking attractive and any top 2-3 stocks inside the sector which are looking ripe for cherry picking?
A. Oil marketing companies (OMC) may provide an upside potential or protect from downside risk as falling oil prices would be beneficial for stocks like HPCL, BPCL, and IOC.
Crude oil hit a high of $68/bbl and has now fallen towards $54/bbl and the larger trend appears to have turned bearish for the Crude oil. This should continue to act as a positive trigger for the sector.
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