Monday, February 7, 2011

Indian market to outperform in long run: Experts

NEW DELHI: “Ours is a long-term bull market which is experiencing a bear phase at the moment. However, the India growth story is intact.” This sentiment was emphasised by technical analyst Sudarshan Sukhani and Amar Ambani, head of research, 

IIFL India private clients, at IIFL and ET NOW’s ‘Buy Now Sell Now’ stock workshop in Noida this weekend . The 5-month low that the market hit on Friday’s trading session has investors worried. 

Post-Diwali boom, indices have witnessed repeated correction and a sharp decline in FII inflows. And the word on the Street is that foreign investors are not going to return anytime soon. Ambani, however, maintains, “Now is not the time to sell. If you have not sold at the highs, there is no point in panicking and selling immediately. Wait this phase out.” 

The outlook in the coming year is not a very bullish one, Sukhani said, adding, “I will not be too surprised if the Nifty reaches a low of 4000 in the next few months. 2011 is going to be a difficult year for the Indian market. FII flows will continue to drop, the smart thing is to stay invested.” His advice is to invest in the blue-chip stocks and refrain from midcap and smallcaps for the next few quarters. 

Sukhani’s top picks include ICICI Bank , Bharti Airteland Sterlite Industries . Ambani also has his eyes on large-cap stocks — Bajaj Industries , Infosys, L&T ,Reliance Industries , SBI , Sterlite Industries and Tata Steel . However, he does not believe in staying away from the entire mid-cap basket, saying instead to choose selectively. His mid-cap bets include OnMobile Global , Petronet LNG and YES Bank

The sectors that he is bullish on include banking, auto and pharma. In this cycle of the Indian market, FIIs and retail investors have emerged smarter, not losing out as much as traders and HNIs. The economic growth story of the subcontinent will continue, the only change that is evident already is that the world will not be willing to pay fancy premiums for Indian stocks anymore. 

Experts remain confident on the outperformance of the Indian market in the long run. “Stay invested through the corrections, keep an eye on stocks that outperform the index, and for the next six months invest only when the index is at around 5000 levels,” are Sukhani’s tips on handling this leg of the market rally.

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