- Will the carnage end on Monday is the big question. A lot will depend on whether there is any clarification on LTCG by the FM. Obviously the 31st March deadline is putting pressure on investors to push sales.
- On Friday there was selling from big investors and financiers also sold shares in the stock markets. However, there was no evidence of institutional shift in their approach to Indian equities or any extend of large scale pessimism.
- FIIs were net buyers to the tune of Rs.950 crores while DFIs sold Rs.(-508) crore on Friday. Evidently there was no institutional selling and FIIs were more active on the derivatives side of the market creating hybrids.
- Markets in the US and Europe corrected by 2% on Friday; but these were a reaction to rising bond yields. The SGX is down by around 50 bps and it looks like a level of 10,650 on the Nifty should sustain as a worst-case scenario.
- With the panic almost overdone in the Indian markets, the focus should be on making the shopping lists ready. Focus on quality mid-caps that have corrected sharply in the last few days on margin worries.
- The one focus area should be on playing quality names in the market. Our top picks will be stocks like L&T, HDFC Bank and Hindustan Unilever, which are really unlikely to be impacted by the LTCG or any kind of margin panic.
- The second theme to focus on will be the big budget stories like rural spending and defence opportunities. One can look at stocks like Bharat Forge, M&M which are a kind of interplay on both these factors. It is actually time to be selective.
- Ideally, investors should wait for the markets to stabilize but intuitively we are closer to buying point than to the selling point.
