The Sensex opened slightly lower, but soon gained momentum on Friday.
In intra-day trading it touched the negative zone for a brief period, but is again scaling heights.
In such jittery times, what strategy should you adopt? Which stocks to buy, sell and hold?
In an hour-long chat on rediff.comon Friday, stock market expert Pranav Sanghavi replied to many such readers' queries. Here is the transcript:
Anand asked, what r hot stocks for short term
PRANAV SANGHAVI answers, at 2008-11-21 15:28:54In the short term the markets will remain extremely volatile. This week has been a prime example of the same. I would not dare take short term risky positions in the current scenario. Rather look at taking long term (1 to 2 year) type positions if the markets are closer to 8K or below in quality frontline stocks.
Mehool asked, Hi Pranav...Good Afternoon
PRANAV SANGHAVI answers, Hi good afternoon. And what is your query?
vip asked, hi pranav plz suggest best scrips pulic sector bank,private sector bank, metal, automobiles, capital good, pharma, cement, engg. whats your suggestion about container corporation?. thank
PRANAV SANGHAVI answers, I would look at the follwing stocks wen the market breaches the 8,000 mark. Stocks such as SBI, BOI, Hindalco, Hero Honda, L&T, Dr.Reddy etc from the sectors u mention. I would not look at a stock like container corporation right now.
dewan asked, why market today jumped so much
PRANAV SANGHAVI answers, We've had a 8 day slide in the markets. So this could very well be a technical bounce and a lot of short covering has also been seen. But one must no get carried away by the upswing.
kumar asked, Hi sir, Good Evening. I want to invest now in ESSAR OIL, SESAGOA, SUZLON, UNITECH, DLF. So, what is your call on these shares for a term of 2 years. Thank you
PRANAV SANGHAVI answers, I would look at SESA, UNITECH, from the stocks you mention. As for DLF I would wiat for further correction. But these stocks should be looked at when the Sensex is below 8,000 not right now when the markets have bounced 500 points.
sudi asked, is there any indication, that sensex will rise in the next 6 month
PRANAV SANGHAVI answers, Well, over a period of 1 to 2 years I am pretty sure the markets will rise. In the short term they should remain volatile.
poorguy asked, Pranav sir. By looking at the situation which sectors will be good for 1/2 years investment?
PRANAV SANGHAVI answers, Go with stocks who have given over 20% jump in turnover and profits in the last 2 quarters. They should give decent groth in the future also even if there is a slowdown. I woud look a stocks like L&T, HDFC Bank, Everest Kanto, IDFC, NTPC etc. but these stocks should be looked at witha 1 to 2 year outlook.
brian asked, when will the market botoom out
PRANAV SANGHAVI answers, No one can predict an accurate bottom fo the markets. But I would start investing in parts in to the markets between the 7,500 and 7,800 levels.
riyas asked, Hi pranav, Is the market going to test its previous low 7400 soon. Can i wait for that level before i go for investment. Thanks
PRANAV SANGHAVI answers, All indications look so. I would surely wait as we may see a sudden crack due to sme really bad news. We've been sliding gradually everyday for the past 2 weeks nearly barring today. This week alone the markets were donw nearly 6%. Global economes are in recession and only bad new is coming out of US. So I would wait.
routsushil asked, Is this the right time to accumulate shares like RPL,RELIANCE COMMUNICATION,STERILITE INDUSTRIES,SESA GOA and GUJURAT NRE COKE
PRANAV SANGHAVI answers, I would wait for further falls. All the metal stocks have sharply corrected over the last few weeks. Global prices are still down and don't look to go up in a hurry. Even the Telecome stocks have corrected sharply so I wouldn't jump in to accumalate these shares right now. I would wait.
Raghunath asked, Markets have crashed so now we must be having good buys. Which are the good scripts for long term holding?
PRANAV SANGHAVI answers, At lower levels, I like, L&T, IDFC, Everest Kanto, HDFC Bank, Indian Hotels, SBI, NTPC etc.
milind asked, how r u sir ?
PRANAV SANGHAVI answers, I am fine thank you and what is your query?
rav i asked, in 2011 itwill 15000
PRANAV SANGHAVI answers, I don't know the exact year but I still have faith in the Indian economy and I'm pretty sure we will see that level in the coming years.
khan asked, i have 6 aban@1775, 10Bhel@1620, 24 REL energy @976, 43 DLF@746, 27 Grasim @ 2230. What should i do. Should i hold or avereage it. Thanks
PRANAV SANGHAVI answers, Unfortuntely you have great stocks barring maybe Rel Energy bt at extremely high prices. Beside holding on you can't do much as this would be a bad time to exit.
raj asked, how does gvk power and unitech look?
PRANAV SANGHAVI answers, Not good in the short term.
khan asked, I have 30 HDIL at 534. Shall i hold or book loss? Thanks
PRANAV SANGHAVI answers, The real estate sector itself is in trouble. Even the frontline stocks have taken a sharp beating. HDIL is surely not a front runner and it will take it that much more time to recover. In the short term I only see a downward trend for the real estate sector as their prices in the market of their developments fal so will their stock prices.
milind asked, Hi Sir Is the market going low 7400 soon
PRANAV SANGHAVI answers, The markets look to test it's previous October lows. Whether they will correct to that level or go below is anyones guess.
raj1 asked, does it make sense to go for real estate stocks?
PRANAV SANGHAVI answers, Absolutely not as the real estate prices of their developments should correct by anything from 10 to 40% depending on their location. So over the next few quarters they should take a hit on the top line as well as the bottom line which will severly affect their stock prices.
amal asked, Hi pranav, Is L&T good buy at 690 for 2 years horizon. Thanks.
PRANAV SANGHAVI answers, I would surle think so. I have personally invested at those levels. If it breaches that level it only provides an opportunity to invest furhter. So do not invest all the money to be invested
at one go.
kumar asked, Hi Sir, Can i buy SAIL and Hindalco, JSW steel, UCO Bank, Dena Bank at this current price? Thnak you
PRANAV SANGHAVI answers, Steel is a metal commodity which is of cyclical nature. In the short term it is on the downward cycle so in the short term do no expect the prices to rise or the stocks to go up. So I would wiat for further corrections and then have a look at them in 3 to 6 months.
vishu asked, i have reliance capital 150shares @ 600 what to do?
PRANAV SANGHAVI answers, Average them at lower levels and hold with a view for 1 to 2 years.
rama asked, Hi Pranav Don't you think it is a waste of time to chat and predict SENSEX. It is impossibleto say what will be the level next week or next year. There was no one who said about a year back that we will reach this level.
PRANAV SANGHAVI answers, I completely agree it is futile to predict a top or bottom as even the best expert will not be able to give you an exact figure. But it is always advisable to stay informed through such market professionals and reading. And I beg to differ about your last statement. Locally, Mr. Ramesh Damani came on recor on a news channel in January beginning when quizzed about whether he thought the markets would touch 25,000 and he said he thought the markets would be very volatile and a major correction is very much on the cards. Global stock Guru, Mark Mobius was also of the same opinion in January.
amar asked, Hi pranav, please give me some 5 very good stocks from Pharma, FMCG industry.? Is nestle good buy at 1300 for 1 to 2 years outlook. Thanks
PRANAV SANGHAVI answers, The FMCG sector has done the balancing act to maintain the index. They were the only ones out performing when the markets were tanking. HUL, Nestle, ITC etc. HUL also touched a low of mid 190's during the October lows of around 7400 but bounced back equall sharply. But if you expect the over all markets to rise in two year time it is a good probablity that the FMCG sector may underperform the markets.
anushree asked, Hi! Pranav Could you please advise at what rate one should invest in L&T, ICICI and RIL?
PRANAV SANGHAVI answers, I would lookat L&T below 700 and RIL around 800-900 with a 1year outlook. Also, I would invest in parts and not all at one go. If the prices fall further then I would buy some more.
Dharmendra asked, I have 2 infosys at 1274/- what should I do hold or sell and like to enter market suggest when should I enter? Like to Purchase L&T, Ril, SBI, Biocon, HeroHonda, Welspun Gujarat, Pidilite, NFL, BHEL, JPAssociates, NTPC, ITC, Punjloyd, Bharti Airtel
PRANAV SANGHAVI answers, One should not panic and sell at this juncture. Hold on. You have mentioned excellent stocks which if held over 2 years will surely yeild you handsome returns.
ds asked, do u advice investing in large caps or quality midcaps now?
PRANAV SANGHAVI answers, I would look at a lot of factors like P/E multiple (should be below 5), Earnings growth possibility (should be above 30% currently and look to continue), Book Value to Price Ratio etc. I would invest in both albiet with a 2 year outlook.
guest9 asked, Are the TCS & TISCO great buys at this price ?
PRANAV SANGHAVI answers, I would not be in a hurry to pick up either of the stocks. I think TISCO has some more room to correct. So I owuld wiat patiently and we may see 10 year lows on the stock. That would be a great time to start picking the stock in parts. TCS also I would wait.
Sreekumar asked, Hello Pranav, the market is still volatile and each day ends in confusion about the next day... to what level do u expect this volatility?
PRANAV SANGHAVI answers, The volatility will continue for a while till global economies settle down.
basu asked, hi,kindly convey your view about balrampur chini?
PRANAV SANGHAVI answers, I would not touch the stock.
abcd asked, Hi Pranav need advice on Pratibha industries shares..please. I have 65 shares @ Rs.300 Should i buy more or wait..6-12 months
PRANAV SANGHAVI answers, I would not hold on in the hope to see very high prices. The frontline stocks lie DLF and Unitech have got hammered. So one should not expect a 2nd tier real estate stock to outperform.
mpagarwal asked, what is the future of india bulls financial services
PRANAV SANGHAVI answers, Although India Bulls Financial services is a highly capitalised company, the current global meltdown will definately affect its results. They may not be hit as badly as compared to other peers.
biru asked, Hi Pranav, Is it the good time to envest in ELSS tax saving MFs?
PRANAV SANGHAVI answers, Yes I would surely look at investing in such equity schemes when the markets are closer to 8,000.
Anand asked, which stocks according to you is hot for short term buying and selling
PRANAV SANGHAVI answers, In this highly volatile scenario a lot of experts are being priven wrong, so one must not venture out to trade with a short term view. You are bound to make losses.
sunpal_mft asked, What about L&T and BHEL for next 2 year horizon?
PRANAV SANGHAVI answers, Both have a huge order backlog and the next two years they should not see a major slip in their topline. BHEL is more focussed towards the power generation secotr where as L&T is a bit more diversified. I would look at both the stocks at lower levels with that time frame surely.
yarabba asked, what are quality frontline stocks.
PRANAV SANGHAVI answers, Stocks which form a part of the Index, have been giving bottomline growt of over 15% over the last 3 years, have enough liquidity in the open market, are dividend paying, strong balance sheet, large Institutional holdings, in the right sector with future growth also evident. Companies with all these or most of these and more qualities make quality front line stocks.
saisraju asked, We are seeing a new phase where Rupee is at it's ever lowest against the dollar( inspite of the wrsening American economy) , oil and share market at their three years lows and where are the markets headed to from here on.
PRANAV SANGHAVI answers, The dollar has been rising mainly due to the hevy FII repatriations. The FII essentially have been selling stock in the market and raise Rupees. With the Rupees they buy dollars which they then repatriate back to their country of origin. Thishas been putting a tremendous pressure on the Rupee and it has slid over 20% in a very short span. This is one of the major reasons.
PRANAV SANGHAVI says, It has been great chatting with you guys. It's time for me t leave. Bye for now.
