Indian Stock Market2
(rajesh jain)
think we will breach that 9,000 again, probably later rather than sooner," he says. At 10,000 levels, Malkani says, he would look out for some good quality midcaps with a higher risk reward, as some that have fallen 40-50- 60% below their peaks, have good growth stories and are stars of tomorrow. Excerpts from CNBC ? TV18's exclusive interview with Jagdish Malkani: Q: Do you think it is the end of the pullback rally that we had seen for the last few days? A: I would think so. The 1,400- point Sensex rise is quite something, but it must be on the back of pretty low institutional activities. Clearly, with these Bernanke talks and the end of F&O, the institutions have been generally sitting on the sidelines, the wise men have been telling us about the housing loan increase across the board, retail, etc, all of which does not bode well for consumer spending power in the months to come. Q: Would you stay away from the banks right now? A: By and large, a lot of that has been built into prices. I have been looking at PSU banks - Oriental Bank of Commerce is at Rs 170 and it is a very well run bank on various criteria. They had to absorb this whole Global Trust Bank (GTB) thing. It has taken it in its stride, but that is a stock, which has a lot of value Q: What do you think will happen to the steel stocks next? There is a bit of sell on the news of Tata Steel and SAIL. Do you think they can bounce back after they absorb the supply or do you think they have peaked? A: There is no doubt that this is a big move. Pricing power clearly gets hardened across the world and our companies take the cues. If nothing else, then look at the sheer bullishness expressed by the fact that Tata Sons wants to take its stake up pretty much around these levels. But still, in a skittish world and steel being such a global commodity, with China CAR being important, if economies are really slowing down, in commodities I would stick to safer plays like cement and sugar. Q: You would not back anything in the non- ferrous pack or buy it on this weakness because stocks like Sterlite Industries and Hindustan Zinc have come off a fair bit? A: They are far too volatile from myliking, but certainly, I would have Hindustan Zinc on my radar. On bad days and on Q: You said that we would give back a fair share of the rise that has happened, 1400 points. Do you think we will form a higher bottom or do you think we will give up all the gains? A: In months to come, I don't think we are going to see 12,500 for the rest of the year and I do think we will breach that 9,000 again, probably later rather than sooner. Q: What do you think will happen to the steel stocks next? There is a bit of sell on the news of Tata Steel and SAIL. Do you think they can bounce back after they absorb the supply or do you think they have peaked? A: There is no doubt that this is a big move. Pricing power clearly gets hardened across the world and our companies take the cues. If nothing else, then look at the sheer bullishness expressed by the fact that Tata Sons wants to take its stake up pretty much around these levels. But still, in a skittish world and steel being such a global commodity, with China CAR being important, if economies are really slowing down, in commodities I would stick to safer plays like cement and sugar. Q: You would not back anything in the non- ferrous pack or buy it on this weakness because stocks like Sterlite Industries and Hindustan Zinc have come off a fair bit? A: They are far too volatile from my liking, but certainly, I would have Hindustan Zinc on my radar. On bad days and on slippage of zinc international prices, purely because of the sheer monopoly that they enjoy, possibly Hindalco Industries is turning around. If you look at copper, they have done Rs 14 as historic and they will probably do Rs 17- 18 at least in this year. So it is not looking very expensive at Rs 160, with all the capex plans that Mr Birla is announcing. Q: What do you do with autos? A: I have been wary of this whole pack, especially with all this interest rate, multiple whammies, input cost and specially retail, with lending expected to get more expensive, fuel cost, etc. So in that pack, I would rather play on something like Punjab Tractors. Or there are two- three good companies even in auto ancillaries, which have been beaten mercilessly. Q: You said that we would give back a fair share of
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