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On market trends.
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A K Prabhakar
Senior Vice President Equity Research, Anand RathiDate : 08 Jun 12 | 10:00 AM |
| Smartinvestor : Hi, this is Surabhi Roy and we have with us AK Prabhakar, Senior Vice President (Equity Research), Anand Rathi |
| Smartinvestor : Good morning and welcome to the Talk Show |
| A K Prabhakar : Good morning! |
| Smartinvestor : Markets witnessed a strong rally with the benchmark indices moving up nearly 4% during last 2 trading sessions. What has led to this spectacular rise? Can we sustain at these levels? |
| A K Prabhakar : On the global front, sentiments have improved and the domestic move by the government in pushing things for infra sector has lightened the sentiments overall. This has led to the rally. These rallies are normally seen and happen on the quantitative easing talks globally but these rallies also fizzle out easily as fundamentals are not very supportive. |
| Smartinvestor : What are you looking forward to hearing from the European Central Bank (ECB)? |
| A K Prabhakar : The ECB left both interest rates and the outlook for economic growth unchanged. ECB Chairman Mario Draghi put the onus firmly on euro-zone governments to solve the bloc's debt crisis, dashing expectations it could take near-term action despite saying the currency area's economy was under increasing threat. |
| Smartinvestor : What could be RBI's stance in the coming policy meet on June 18? Do you foresee a 25 bps cut and signs of reduction in key policy rates? |
| A K Prabhakar : Our economist feels that rate cuts look difficult due to many concerns in growth and inflation front. So we feel that there is still time for rate cuts as the Reserve Bank of India (RBI) may look on liquidity front (having CRR cut) but it will wait for 10 days before the policy to take the decision on CRR cut as well. |
| Smartinvestor : Interest-rate sensitive shares such as banks, auto and infrastructure stocks have surged the most during the bull run. Do valuations in these sectors look attractive at current levels? |
| A K Prabhakar : Rate sensitive sectors have seen a rally as they were the most corrected one’s in the down trend. Though valuations are becoming attractive we may wait for some time as the pressures in the sectors are still visible. We feel that for Auto, going forward we see Tata Motors, Bajaj Auto & Hero Motocop may see 8-10% correction. |
| Smartinvestor : Which are your top three picks in bank, auto and infrastructure shares? |
| A K Prabhakar : Among Banks, select stocks like Karnataka Bank, United Bank of India (UBI), Karur Vysya Bank can be good shorting candidates. We hold a cautious view on Auto segment. From the Infrastructure space, stocks like National Buildings Construction Corporation (NBCC), JP Associates, Engineers India can give good returns. |
| Smartinvestor : What is your outlook on the mid-and small-cap spaces? Do you find value in any of the stocks from a medium-term perspective? |
| A K Prabhakar : We continue with stocks specific approach and stocks specific upmove is always possible in any kind of the markets. Rallis, Zydus Wellness, Emami, Dish TV, MOIL, PTC India and Neyveli Lignite are few mid-and small-cap stocks that interest us from a medium-term perspective. |
| Smartinvestor : Thanks. See you again soon. |
| A K Prabhakar has logged out at 08-Jun-2012 10:22:14 am |
| Smartinvestor has logged out at 08-Jun-2012 10:22:18 am |
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