Resumo de Indian Stock Market

this is what rajesh jain has to say,,

Don't postpone your buying: Rajesh Jain

2006-06-27 16:54

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According to market analyst Rajesh Jain, market has got

into poor liquidity and poor commitment groove. He says

that every time the "market tries to build up
confidence,

it seems to lose it in the babble that's building up
around

it".

The Fed factor and the conflicting news on that front
are

also playing their part. But he asks people not to
postpone

their buying.

Excerpts from CNBC-TV18's exclusive interview with
Rajesh

Jain:

Q: Is it likely to be this skittish ahead of the Fed
funds

meet, or is there something else spinning the market
down?

A: The Fed rate hike is certainly a factor. What's been

really driving the market since Sunday has been the

internals and build up just ahead of the F&O expiry.

One cannot get away from the fact that one did real

vertical take-off from 8800 level, practically 1700-
1600

points all the way to 10,400. Across the board, even

midcaps joined the party later. There was a vertical
rise.

That is going to attract selling from several sections
of

the long-term portfolio investors and also from those
who

missed out selling on the previous rise.

Ahead of the F&O that vertical jump gives a position
build

up, which one would definitely want to book profit. So
when

one did not get it beyond 3060 levels on the Nifty or

10,400 level on the Sensex, it is not surprising that
one

had sharp position unwinding as well as probably

adventurous shorts.

One has not really seen great news flows or great news

events happening, which should really be causing these

kinds of swings.

Q: How are you looking at steel sector particularly now

that Posco had agreed to go ahead and raise some of its

prices in the light of Mittal - Arcelor merger? Tisco
and

SAIL?

A: One has to look at the volume driver for the Indian

manufacturers- whether it is Tata Steel, or Jindal
Group or

any stocks. Investors will do well to focus on the

tremendous demand that exists. There is also the

possibility of exports and international players
visiting

India.

When you have such a volume driver, all corporate
mangers

will tell you that only thing that can really spoil the

party would be margin contraction. That is something
that

is linked to commodity prices.

If one is a long time investor, don't try to take a
call on

the way LME is going to move or commodity prices are
going

to move and what other steel companies will do to
Indian

steel prices. Instead, just focus on that volume
driver. We

have an economy, which is hungry for consumption.

Q: Have you taken a look at ITC, HLL, they are pretty
much

out performers in today's indices as far as FMCG space
is

concerned?

A: One has to differentiate fundamentals from the

momentary technical drivers. I am sure both of them
have

witnessed some sharp concentrated buying from
institutional

segment or deep-pocketed HNI segment. It's for the
simple

reason that both were offering tremendous value at a
great

ticker price.

Aside of that in Hindustan Lever, we have seen very

conflicting development. One is not hearing very good

things about the food business. There is this real
estate

play. It is offering you success in the health care,

personal care and home wash segments. At a price of Rs
220-

Rs240, HLL is in a good buy zone. I am sure that there
is a

deep consolidated buying going on there.

ITC looks good from every angle. What you have seen
today combination of buying and internals of the market

ahead of the F&O expiry. Both are good picks on
fundamental

level. But retailers would do well not to attempt
buying

until next Monday. One will really need to see this
market

settle down before one goes for buys.

Q: What did you make of Reliance?s expansion plans? How
would you play Reliance now?

A: If I am in retail, I would buy Reliance Industries
depending on how the market shape up from the following
Monday. But aside of these short-term F&O expiry related
issues, Reliance even at these levels look like a good buy.
The long-term picture is very clear. Tactically,
implementation has been good. One would really wait for all
the possible dips to buy into Reliance Industries.

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