here was a brief rally yesterday, supposedly on the back of a hike in petrol prices. It has kind of stabilised today. What do you think is the near-term mood of the market? Do you think a couple of such moves would enable the market to cross 5000-5100 levels or the global uncertainty and policy paralysis are enough for the markets to be below 4900-50in
months.
Hence, the possibility of interest ratescoming off immediately has also reduced. So, there is no case for a significant upside beyond 5000-5100.
Once there is some kind of a short-term resolution to the European problems, you might see stability in the rupee and the markets.
We have seen 4800 act as an important level. There is huge amount of open interest built up around 4800. So, that may act as an important support at least in the short run.
ET Now: Some believe that, at this point, one could take a contrarian call on some of the cyclical names which have seen a fair amount of selloff. Is that a position you are also taking?
Analysis: We have seen some kind of a pullback in stocks like ONGCand banking stocks like ICICI Bank, SBI among others. This was primarily driven by short covering. But any such pullback may not be sustainable and one will have to take a quick exit. So tactical opportunities could be played out with some tight stop losses.
What about banks, especially PSU banks? Are you upbeat about their performance from here on?
It is believed that some of the banks and Bank Nifty are looking quite strong. There may be a quick up move of about 3% to 5%, particularly in Bank Nifty, ICICI Bank and State Bank of India.
Fundamentally, we do not think there is a case for a big upside from current levels as the benefit of the rate cut will take a little longer to reflect in the higher margins. Also, overall core growth will take a while to go up.
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Markets to remain rangebound unless domestic fundamentals improve: Manish Kumar, CIO & EVP at ICICI Prudential
Markets to remain rangebound unless domestic fundamentals improve: Manish Kumar, CIO & EVP at ICICI Prudential
"If global liquidity dries up, our markets will probably remain rangebound and continue to drift sideways," says Manish Kumar.
Readers' opinions (1)
A. S. Mathew (U.S.A.)
25 May, 2012 04:47 PM
There is a psychological warfare is going in the hearts of the consumers of the world, especially in the U.S., and the 99% of the people, both rich and poor have a different mindset of thinking twice and deeply before making the final decision to buy even a dollar worth of consumer goods. Once discount stores were filled with people, buying even items which were not needed. It was a shopping madness; now the trend has completely changed to "buy only the needs". This consumer conversion has created greater impact in the economy, and the consumers are not going to change to the old mentality of "lavish spending" any time soon or never. Based on this transformed consumer attitude and confidence, nobody needs to expect any miracles in the economy any time soon. On the other hand, the depreciated asset values-tight credit and higher unemployment rate make the situation far scary.
25 May, 2012 04:47 PM
There is a psychological warfare is going in the hearts of the consumers of the world, especially in the U.S., and the 99% of the people, both rich and poor have a different mindset of thinking twice and deeply before making the final decision to buy even a dollar worth of consumer goods. Once discount stores were filled with people, buying even items which were not needed. It was a shopping madness; now the trend has completely changed to "buy only the needs". This consumer conversion has created greater impact in the economy, and the consumers are not going to change to the old mentality of "lavish spending" any time soon or never. Based on this transformed consumer attitude and confidence, nobody needs to expect any miracles in the economy any time soon. On the other hand, the depreciated asset values-tight credit and higher unemployment rate make the situation far scary.
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