The market on Wednesday opened weak and has been trading in the negative zone throughout the day.
While the world cheered the accession of Barack Obama as the 44th President of the United States, investor sentiments continued to remain negative.
The Dow Jones dropped over 300 points on Tuesday. Earlier the European markets too closed in the red. Today all Asian markets slumped.
In such jittery times, what strategy should you adopt? Which stocks to buy, sell and hold?
In an hour-long chat on rediff.com on Wednesday, market expert Pranav Sanghavi, replied to many such readers' queries. Here is the transcript:
hari asked, what is the reason of mkt felldown
PRANAV SANGHAVI answers, at 2009-01-21 15:16:08There were a lot of reasons. One we heard the news of Royal Bank of Scotland making potential loss of over US$ 40 billion. This only signals that there are still more bad news yet to hit the markets. Two, the US markets had tanked overnight post Obama's speech. The Dow was down by 4%.
atul asked, I have 150 GPIL @ 58 RS, 100 TANLA @ 42, 100 MONNET SUGAR @ 20.40, 20 TCS @ 430, 25 SIEMENS @ 208. Am i investing correctly for long term?
PRANAV SANGHAVI answers, From the stocks that you mention, I would hold on to TCS and Siemens. Siemens too has an issue wth the promoters buying out a 100% subidiary at a favorable price to themselves which hs made the stock correct. But in the longer term these two stocks should give you decent returns from current levels.
rockee asked, is Satyam a deal buy for long term?
PRANAV SANGHAVI answers, I would still not dabble in Satyam as there is still a lot of unclarity on various issues relating to it's finances, clients and staffing. I would wait for more clarifications and clarity to invest if at all I do invest.
Arun asked, Sir, I am holding 2800 shares of Nagarjuna fertilizers @ Rs.54. Is it advisable to wait in this scrip? I am ready to wait.
PRANAV SANGHAVI answers, I would not look at the stock in the current scenario. The price of Urea has fallen substantiall and thereby eroding margins for major players.
Shruthi asked, I have Jaiprakash Associates 70 shares @ Rs. 90, I would like to buy sesa goa also. Is it good?
PRANAV SANGHAVI answers, I would not hold on to JP Associates. I would rather look at Sesa with a long term. Sesa is surely a better bet than JP Assoc.
anandjay asked, outlook of punj lloyd
PRANAV SANGHAVI answers, I like the stock despite the percieved slow down in infrastructure spend over the coming months. They have managed decent results in adverse scenario. So I would back them with a long term outlook.
VK asked, Whethe rteh PPF is good option for a long time investment. If i invest 10,000 in the first year should I have to invest the same amount every year or I can invest any amount and when it'll be matured for withdrawl?
PRANAV SANGHAVI answers, PPF is surely one of the highest interest bearing income instruments available in India. The high FD rates are a short term phenomenon. You can invest higher amounts with an upper limit for tax benefit.
sanjith asked, i am planning to invest in icici bank shares. what would u suggest now for 3 or 6 months term? is banking sector still a safe haven? kindly suggest me.
PRANAV SANGHAVI answers, I would pick HDFC Bank over ICICI for the simple reason of it's quarerly performances over the last 2-3 quarters. ICICI also is a decent Bank but if given a choice I would prefer SBI or HDFC Bank over ICICI.
alok asked, I have purchased 100 shares of RIL @1430/ what is the prospect
PRANAV SANGHAVI answers, A couple of weeks ao I had sai that RIL looks to touch the Rs. 1000 mark. I think it will touch that before moving up. RIL will always move in tandem with the markets and right now the markets are in a downward trend.
arunm asked, what is your view of lt post satyam episode
PRANAV SANGHAVI answers, Mr. Parekh and other board of directors are trying to salvage the situation but I think in he short term they will be fighting a sinking boat type situation. I think the biggest sufferers could be the shareholders as clients would move to other software vendors, staff also could eventually move to other peers. Shareholders don't have much option.
AJAY asked, PLEASE ADVICE THE STOCKS TO INVEST IN FOR A HORIZON OF 3 YEARS
PRANAV SANGHAVI answers, I would look at stocks like RIL, SBI, L&T, IDFC, NTPC, Sesa Go, Indian Hotels, Voltas, Titan, Hero Honda etc.
rana asked, What are the prospects of Glenmark, Mphasis & Glaxo? Can I invest at these levels. Thanks Pranav.
PRANAV SANGHAVI answers, Glenmark has corrected sharply along with the markets meltdown. They are a quality player in the pharma sector. I would surely hold on to the stock. To get in I would wait for further dips as markets still look a bit weak. Glaxo is another stock I would look at with a long term outlook.
anandjay asked, whether fortis health care worthwhile for long term?
PRANAV SANGHAVI answers, I would not look at that stock as there are so many quality stocks both mid-cap and large cap stocks available at pretty attractive prices.
Super asked, how can i trade in options?
PRANAV SANGHAVI answers, Options are a complex instrument and one should have thorough knowledge before investing in them. I suggest you take on a training course at any of the leading training institutes of NSE or BSE and then delve in Options.
Lram asked, Hi Pranav , i had bought MF of ICICI Pru Dynamic Plan(G) fro Rs 52000 last year and under loss , i m planing to buy Gold MF to recover it for long term , which will be suitable?
PRANAV SANGHAVI answers, Most of the top performing MF's of previous years are in negativ territory this year due to the market meltdown. The quality MF's will recover but will take time to do so. Gold has already been riding high. I would rather get in to Gold when is nearer its 52 week lows than at current levels.
deepak asked, Which sectors do you see will start recovering sooner and will outperform the others in India.
PRANAV SANGHAVI answers, I think if Government lives up to its promise of not slowing down on infra spend then the infra, steel, cement and related sectors would see a direct impact. Then lower interest rates could positively affect the Banking sector in times to come. I alsolike the Telecom secor because despite its stupendous growth rates, our penetration of India as a market is still low. There is still potential in the sector. These are just some of the sectors.
sandip asked, can i buy unitech in this level?
PRANAV SANGHAVI answers, I would prefer to get in towards its lower levels of around Rs. 25.
amit asked, Is this the good time to invest in SIP and if so how much we should invest permonth and which all funds are good to invest
PRANAV SANGHAVI answers, This would be a good time to get in to SIP's so the volatility of the markets would be mitigated by the smaller investments spread over a period of time rather than a large investment at a single time. You should stick to Blue CHip funds which invests in index stocks or large cap diversified stocks.
atulbali asked, is this the time to take a call for longtem investment? What about buying reliance capital at this time?
PRANAV SANGHAVI answers, I have
been mentioning over the last few chats we have a good chance of testing the October lows. We are pretty close. I would use that level as a benchmark to start inveting albiet with a long term outlook. Rel Capital has given a 11% jump in it's profits despite a tough economic and financial scenario. You could back the company but when markets correct and with a long term outlook.
Asai asked, I brought 100 shares of unitech @ 27 rupees. should I hold on or sell it?
PRANAV SANGHAVI answers, If you are a long term player and have faith in the stock you could surely hold on. If you are a shor term player you could book your profits at Rs. 35-40 levels.
awse asked, hi, i have aban at 1900 hdfc@2000,jaypee @167,punj lloyd@269.please suggest should i average out or sell and book loss . i can wait. also can we buy front line stocks now for 20-25%returns. or it is better to invest in mfd. hope to get an answer
PRANAV SANGHAVI answers, HDFC and Punj could be avreaged every time when the markets correct. Jaypee I would not. There are many frontline stocks which could be bought wit a 2 year time frame and they would surel give you a 20 to 25% return over that time frame.
nishant asked, I have got ONGC, NTPC, TCS and Reliance Power. Should I hold or sell?
PRANAV SANGHAVI answers, I would switch Rel Power to probably NTPC or Tata Power. The others I would hold on to.
bharathish asked, Sir, What is short term target for nifty
PRANAV SANGHAVI answers, I am not a technical analyst so can't give you targets, but as I have been sying there is a good chance for our markets to test it's October lows in the short term.
dinesh asked, Hi pranav, Can u suggest on JP associates,IDFC,IVRL UNITECH and Suzlon.
PRANAV SANGHAVI answers, I like IDFC, Unitech and Suzlon from the stocks that you have mentioned. The latter two have lost over 90% of their stock value. So they could easily give you a 25-30% return over the next 6 to 12 months.
awse asked, hi, i have aban @ 1900 hdfc@2000,jaypee @167,punj lloyd@269.please suggest should i average out or sell and book loss . i can wait. also can we buy front line stocks now for 20-25%returns. or it is better to invest in mutual fund. hope to get an answer
PRANAV SANGHAVI answers, I like Aban, HDFC and Punj. You could average them on corrections.
deepak asked, isn't TCS trading at very lucrative values. .considering the market will recover after sometime, don't you think TCS will perform very good in future.
PRANAV SANGHAVI answers, TCS is trading at 9 to 11 times its earnings. It could correct further depending on the markets. A lot of their customers are based out of USA. They will face some slowdown as the US economy slows down. On the other hand the rising dollar benefits all the tech sector. But I don't think TCS will have a smooth upward path.
vive asked, Hello Sir...I have RPL 600@77 Should i add more ? I can wait for 4-5 yrs...and also your views on L&T,NTPC and Powegrid
PRANAV SANGHAVI answers, With that time frame you should get a decent profit on RPL. I like all the three stocks you mention for the long term. I would surely invest at lower levels and hold on.
riti asked, Hi pranav,i have aban 10@2000,and bhel 10@2000.What to do?how much time it will take to reach that level again
PRANAV SANGHAVI answers, You have got in at very high levels. You will have to probablyaverage at lower levels to be able to exit faster. You will hve to wait for a long time otherwise to see those levels.
aijazaijaz asked, i am new investor pls advise which shares to buy at this time
PRANAV SANGHAVI answers, Stick to front line quality index based stocks.
shekhar asked, (1) What is your take for the days to come? Has the market bottomed out yet or is the worst yet to come? (2) What are the sectors in the coming years that are expected to perform well? (3) What will be the performance Indian Economy as compared with teh Global (especially America economy?)
PRANAV SANGHAVI answers, I think in the short term we could retest the Oct lows. beyond that for the next 6 to 9 months we could see range bound flattish markets. Beyond 1 to 2 years I see our markets rising steadily as the smart money will eventually come back to econmies growing at over 4-5%.
Rakesh asked, Hi Sir, Can u insist about the Kotak Bank buying as on today
PRANAV SANGHAVI answers, Last year they had a very large exposure to loans in the equity markets. They have pruned that portfolio but I would still look at it skeptically. I would rather look at an SBI or HDFC.
mahesh asked, Hi Pranav, Please let me know can i buy SBI shares now?
PRANAV SANGHAVI answers, It fel quite a bit today. I think being an index heavy stock it could correct a bit more. Around 1100 levels and below you oculd surely buy in parts on dips with a long term outlook.
matty asked, HI Pranav, Good Evening. Can you please me your take on following stocks : NDTV, Balaji Telefilms, Crest Animation, UTV Sof, Silverline Animation ? Thank you.
PRANAV SANGHAVI answers, Of the media stocks I like UTV, NDTV and Balaji. Crest Animation and Silverline Animation I do not follow so will not be able to help.
Parveen asked, hi. i have been having rel, hdfcbank and few more..total i am in 50% loss. i want to maximize returns to nullify my losses..i am thinking of buying satyam for 2 yr scenario..
PRANAV SANGHAVI answers, Satyam may not last for that time frame. So to nullify you losses you should rather look at strong performing comapnies which will continue to do so in the futue than pick a company like Satyam which may not even last. I would surely look at HDFC Bank itself just going by its results over the last two quarters which were difficult ones for banks.
Himanshu asked, Hi Pranav, I have shares of IDFC 100 shares @ Rs. 57. What is the future of this stock?
PRANAV SANGHAVI answers, I like the stock. The company has diversified into various verticals in the financial services and profitably at that. I would surely hold on and buy further if it crosses the Rs. 50 mark with a long term outlook.
neha asked, Pranav..can u take a guest lecture in our college on Stock market fundamentals
PRANAV SANGHAVI answers, Sure you can contact me through the Rediff people. Thanks.
shree asked, how is sobha for long term
PRANAV SANGHAVI answers, I would not bet on Shobha Dev for the long term. I would rather look at stocks like DLF, Unitech, Orbit etc.
radhika asked, how long it will take for the sensex to reach 10000+.i m tired of this grave situtation
PRANAV SANGHAVI answers, Post a consilidational phase and once the negative news are out of th picture we should go past the 10,000 mark. But no telling when especially with the result season on and the elections round the corner.
abdriver asked, I bought HDFC bank at 1005 and Rel Power at 275. Should I keep holding these two?
PRANAV SANGHAVI answers, I would surley hold on to HDFC Bank but I would switch Rel Power to a NTPC, Tata Power or Power Grid.
gsbhatia asked, I am interested to buy Suzlon, IDFC, IDEA, Sesa Goa,Hindalco. Shall I wait or enter in the market Thanks
PRANAV SANGHAVI answers, I lke all the stocks that you mention and yes I would wait for the markets to correct before I pick up these stocks.
PRANAV SANGHAVI says, Well it's been great chatting with you all. It's time for me to leave. Bye for now.
