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Pressured by high global crude prices and the losses incurred by the oil companies, the government on Wednesday, after much deliberation, was forced to hike the prices of petrol, diesel and LPG.
The market opened in the positive region but soon skidded into red.
Sensex closed down 448 points, with auto sector stocks turning weak and oil sector stocks notching up good gains.
What strategy should you adopt? Which stocks to buy, sell and hold?
In an hour-long chat on rediff.com on Wednesday, stock market expert Pranav Sanghavi, director, Jitendra Harjivandas Securities (P) Ltd, replied to many such readers' queries. Here is the transcript: (Due to circumstances beyond our control, date and time of chat may change)
PRANAV SANGHAVI says, Good afternoon everyone and welcome to the chat. Let's begin.
sameer asked, Hi pranav, Nice to chat with you. I have bought the following stocks and my total investment as of now is about 3 lakhs. Is my portfolio contains good diversified stocks?. I would like to invest 2 more lakhs. Do you want me to add any more stocks in my portfolio or accumulate more in the current portfolio. I like to hold all these stocks for 1 to 2 years outlook. please suggest. 15 Bajaj Auto, 15 BHEL, 11 REL, 10 Canara bank, 28 DLF, 30 GMR Infra, 25 GRASIM, 10 HDIL, 20 ICICI BANK, 2 ONGC, 10 Pantaloon retail, 33 RELCOM, 15 Jindal saw, 22 SBI, 10 Suzlon, 10 TCL, 13 Ultratech, 10 UNITECH.
PRANAV SANGHAVI answers, at 2008-06-04 16:02:10Thank you Sameer. If you are a long term investor, then buying in small quantities of say 10 to 15% of what you actually want to buy could be done in the large cap diversified stocks. But one must be carefull about the Oil stocks as the Crude prices don't look to correct very soon.
riyas asked, Hi, Today the sensex is crashed to around 500 points. Where is the market heading? Do we expect more downside like todays one in the future? Thanks
PRANAV SANGHAVI answers, As I had mentioned in my last chat the markets look weak. It could further fall as man support levels are beig broken effortlessly. In the short term yes the makets will remain volatile and weak. But over 1 year outlook some of the quality fundamentally strong socks could be looked at but in parts on dips like yesterday and today.
sai asked, Hi Pranav, Is this right time to buy cement stocks like ACC, Ultratech. What is you take on Canara bank and GMR infra and suzlon energy. Thanks
PRANAV SANGHAVI answers, Cement normally does not out perform during the monsoons due to the perceived lack of demand. So you could wait for a bit before entering the cement stocks. Canara Bank is trading I think around or just below its book value. If you are brave enough to take a 12 month plus outlook you could look at thestock. I think it has also breached the previous lows of this year today.
balsprit asked, Hi, pranav good morning, from last one month i lost 50K, all my portfolia is in red ,folllwing stocks down by 25-30%: DLF, Gmrinfra,indianbank, aurobinda pharma,jp associte,ntpc,rel petrol,reliance power. please advice me shud i hold above stocks or do i need to averg.
PRANAV SANGHAVI answers, Index itself is down 23 odd per cent since January 1, 2008. You will only have to hold on to see improvement in prices. That appreciation also may not come in a hurry. I had said in around February that we have had a long bull run of over 4 years so we should not get perturbed in a short bearish phase.
sunil asked, Hi..u had suggested for IDFC. I took at 162. now its a33..what to do?
PRANAV SANGHAVI answers, It has approached it previous lows of his year. If you could average and hold for a long term then only do so. I have always maintained you should buy the stock with an outlook of 6 to 12 months and not 1 or 2 months. I still feel the stock is funamentally strong and you will see profits.
THAKKAR asked, SHOULD I BUY BHEL 1466 AND CROMPTON AT 230 AND ALSO ABOUT GODREJ INDUSTRIES
PRANAV SANGHAVI answers, In my last chat I hd mentined I would loolk at BHEL between 1350 and 1450. It nearly breached 1450 today. I would wait for a while before buying that stock.
Sudesh asked, Is it worth buying deccan aviation at todays rate of 103
PRANAV SANGHAVI answers, No. I would not risk my money on an aviation stock surely.
Pradeep asked, hi Pranav Sbi & sesagoa at the currect level are good buy or not,whwn unitech will recover
PRANAV SANGHAVI answers, Yes I like both and at all dips in these stocks I am a buyer. SBI especially you would have to hold for more than a year to see good returns. Because in the short term factors like high interest rates, inflation etc will affect the performance of teh banking stocks to an extent. Real estate stocks will take some more time to recover from the hammering they have receieved. As people are expecting a slight downturn in our economy so will real estate prices correct.
pransingh asked, I have 55 DLF @ 760,rel power@430, now these stocks are at 555 and 202 , what i shud i do, do i ned to avrg or hold.When I will get reliance power bonus shares
PRANAV SANGHAVI answers, You will receive the bonus shares soon as SEBI has a mandatory period before all bonus shares have to be issued to shareholders. But it will surely take time for LF to appreciate by 50% from current levels. You will have to wait for 6 to 12 months within which if there is a rally during Diwali or some other factor you could see our prices.
PRASHANT asked, Should i take in this situation Banking stocks like icici,sbi,Please suggest for long term stocks to buy i.e. 1 year
PRANAV SANGHAVI answers, One could take a contrarian call and look at banking stocks witha 1 to 2 year perspetive. Many of the top banks are trading below their book values. But in the short term there are a lot of negative factos affecting the baning sector like high interest rates and inflation.
kk asked, Propspects for GMR infra?
PRANAV SANGHAVI answers, Look at the stock nly witha very long term perspective. I don't think it will go anywhere in the short term.
rds asked, Hi, which stock can i buy now for long term
PRANAV SANGHAVI answers, I would wait for the market to settle down a bit. Then look at index heavy weightage stocks as they will lead the market rebound when it happens.
piyal asked, I want to sell some shares to raise money to repay a housing loan for which I am paying EMI. When can I sell at a reasonable price, or rather, when do you expect the market to turn around?
PRANAV SANGHAVI answers, It will surely take some time for the market to rebound as right now theres only negative news everywhere. Be it the crude prices, high inflation, high metal and commodity prices, falling corporate proifits etc etc.
shah asked, I had l&t,rpower,rpl,ispat dlf, what should i do with his shares?
PRANAV SANGHAVI answers, You could surely hold DLF and L&T.
arvind asked, hi can you please tell us what to do in present context is the pain is over or we start accumulate now and what stocks we look now
PRANAV SANGHAVI answers, No one can predict when the market will bottom out. So such corrections can always be used to buy in small quantities in stocks which you were ready to buy say four months back t 30 to 40% higher prices. Quality fundamental stocks could be looked at but I repeat in small parts and on major dips on the indices.
joshi asked, hi ,i just want know how to take stock online
PRANAV SANGHAVI answers, I didn't follow your question, sorry.
rangaswamy asked, Hi.. What is ur openion about Sejal Architactural Glass Ltd. Shares, they opening on 9th June, shall i purchase or not
PRANAV SANGHAVI answers, I would be extremely cautious and wary of new issues especially the lesse known ones as in this scenario they should open weak.
gauravmmec asked, hi, Please let me know the prospectus of DLF,Indian bank , everest kanto, Indian bank , AXIS bank ,Unitech ... waiting period 1 year
PRANAV SANGHAVI answers, DLF and Everest Kanto are leaders in their fields being Real Estate and Cylinders. Dlf is one of the largest players in the country in Real Estae but with a weakenin economy, expected fall in real estate prices, coupled with low demand could lead to a few lack lustre quarters. Everest on the other hand could be affected by rising metal prices which being its raw material. Both have given stellar perforances in the past and are strong fundamentally, so I would not write them off completely.
san007 asked, should i buy spicejet at Rs30?
PRANAV SANGHAVI answers, As I mentioned earlier at this juncture of high fuel prices I woud not bet on aviation stocks.
manoharan asked, What is the sensex level factoring all uncertainities prevailing for another six months.
PRANAV SANGHAVI answers, On the lowe side one cannot rule out sub 14,000 levels if all things go worng at the same time like we had te crash earlier this year. On the upper side 18500 could also be a possibility if things start moving positive both interms of news flow and corporate performance.
pk111 asked, waht do u suggest rgd moserbear, neyveli lignite & najarjuna fertilisers
PRANAV SANGHAVI answers, I like Neyvelli from the stocks you mention.
Nishith asked, hi, i save rs 1000 per month from my salary. i want to invest in shares. pls let me know which script i should invest in.
PRANAV SANGHAVI answers, Rather than going directlyI suggest you take up a SIP scheme with a good fund house offering a large cap diversified growth scheme.
Shakti_Sinha asked, Hello Pranav, I have 1000 K SERASERA PROD shares @ 34. What should be the strategy for this scrip? Hold or Sell? If Hold, then how long? Pls advice, thanks.
PRANAV SANGHAVI answers, K Sera is mostly a movie production house. So its performance will mainly depend on the out come of it's movies rleased. So the stock can be pretty olatile and it would not make a sound long term investment according to me.
Tanaji asked, Hello sir, Good evening. I am having 47 Reliance industries@ 2822/-, 270 RPL@168/, 45 GMR@ 170/-, 200 NTPC@160/-, 28 RCOM@ 551/- and 34 DLF@ 750/-. What is your valuable suggestion? Should I hold or need any partial selling, as the market is drifting every day. I am a long term investor for 3-4 years. Please suggest.
PRANAV SANGHAVI answers, I would nt panic and sell at these levels surely. You would need to hold on for another 12 months to see profis in most of your holdings. But in the short term things do look weak still.
manoharan asked, At what sensex level we can start entering the market?
PRANAV SANGHAVI answers, The index is already at about 15 PE. Once it breaches 14 PE you could start lookig at specific stocks which have corrected more sharply than its peers and look at those stocks with 6 to 12 month outlook.
dkj asked, What is the future of RNRL. I have 150 shares @ 126/-. Should I average this or wait for low price.
PRANAV SANGHAVI answers, I wouldn't advise averaging RNRL as the stock's outcome will depend on the company's battle with RL in the courts.
Santosh asked, Hi.. Ur opinion on GMRInfra, Renuka Sugar, Reliance Power, Sesa Goa
PRANAV SANGHAVI answers, GMR is a log term play as its projects are lare and take 2 to 3 years or more for completion and full profitability to reflect in its books. Sesa is another stock I like an I would continue to hold for the bonus shares recently announced.
Satya asked, While the market is down, I am buying good stocks(Large and midcap) putting all my money. Will this strategy pay me good return??
PRANAV SANGHAVI answers, It is a good idea depending on which stocks you have purchased. If they are fundamentally strong stocks and you have invested with a long term outlook then yes the strategy should pay you well in the future.
forstock asked, Hi pranav,At which price i shud enter in to rel ind, sbi, grasim, acc,ici bank, sail,sesagoa, l&T
PRANAV SANGHAVI answers, Most of the stocks are index andthe Nifty for example has fallen over 12% in just one month. So I would wait for the slide to ease out maybe even make a one or two day upswing before I enter.
mahendaran asked, Sir, How long the market will be like this is there a chance for another bull market in next two years time.
PRANAV SANGHAVI answers, In two years time we will definately see another upwad rally which could last more than 3 months.
abhi asked, How much down the share market will go?is it possible to go down below 10000??
PRANAV SANGHAVI answers, It looks impossible for the markets to come down to 10,000 leves.
shweta asked, shall I more shares of L&T,SBI,DLF ,RPL now to divide the risk as i bought this shares at some high level and now it is in red
PRANAV SANGHAVI answers, I would buy in small parts on every major dip.
mahendaran asked, Sir, L&t at Rs.2700 is a good buy.
PRANAV SANGHAVI answers, Even in difficult conditionsthey have given a good performance. I still like the stock and would continue to hold. To get in I would wait for some down slide due to over all market conditions.
mahendaran asked, Sir, L&t at Rs.2700 is a good buy.
PRANAV SANGHAVI answers, But one could but for the bonus issue announced.
tonyv1 asked, Sir, what about the prospect of banking company shares. all are finding steep down trend now. What could be our strategy who have already invested
PRANAV SANGHAVI answers, One could take a contrarian call and buy the good quality banks with a 1 to 2 year outlook.
Girish asked, Is it right time to buy RPL or will it go down further?
PRANAV SANGHAVI answers, In the short term RPL would move with the markets. If the markets falls it will also fall. Once the commercial production of the refinery begins then the stock should see sme upward movement.
SG asked, why are the good engineering companies like bhel, concor, LNT, siemens etc. going down. What should long term holders do in such a scenario. My portfolio has lost a lot during these days.
PRANAV SANGHAVI answers, There are various factors, one being a view that infrastructure and real estate sectors will slow down. Two, the prices of raw materials like metals is shooting up which would adversely affect the prifitability. And everyone who was Long only investor has lost over 20 to 25% of their portfolio value if not more. If you ar holding fundamntally strong and quality stocks then one shoud not panic.
mahendaran asked, Sir, I am holding stocks for a long time since Jan 2007 but no use. Longterm holding of stocks are risky. When to buy and how to sell it.
PRANAV SANGHAVI answers, You could set profit targets for your investments. Once that target is achived you should sell and not wiat for more profits. Be very strict in booking profits. If you had bought in Jan 2007 you must've surely reached a reasonable profit target by November or December 2007.
saurabh asked, SIR, FUTURE OF R-COM AND RPL.
PRANAV SANGHAVI answers, I think both with a 6 to 12 month outlook could be looked at. RCOM would face more competition as new players have been allowed to enter the markets. RPL would have to start its commercial production on time for any major upward movement in the stock.
saurabh asked, RELIANCE AT 2200 3 YRS HORIZON, WAIT OR BUY
PRANAV SANGHAVI answers, Surely wait.
shoeb asked, what is market expections from here when petro prices are going up
PRANAV SANGHAVI answers, Thats a good question. With the Diesel accounting for a major cost of the transport sector all commodity prices are also likely to get affected. This in turn would send the inflation going higher. Also the measures taken today by the Petoleum ministry will only privide temperory relief. If say the Crude price jumps to US$150 over the next fe months there would again be a crisis on th hands of the government.
PRANAV SANGHAVI says, Well it has been great chatting with you all. Bye for now.