The markets in India are in sell-off mode in line with weak global cues. In these volatile times, what sectors or stocks should investors look at? Anil Manghnani of Modern Shares & Stock Brokers feels investors could buy Reliance on every decline. "Reliance is still a buy on every decline. This is an opportunity to get into Reliance. The immediate support is at about Rs 1,680. They are lower levels but at Rs 1,680 at least from an investment point of view you can start buying," he feels.
On Tata Steel, he is of the opinion that investors could enter between Rs 525-540 levels. "The way the stock broke yesterday was very discouraging. A huge amount of delivery base selling has taken place. May be the bounce whenever it comes may not be as sharp in that stock. If you are looking to get into the stock right now, between Rs 540 and Rs 525 is where you would start buying into this stock," he feels.
In real estate, Manghnani feels that investors could look at Unitech and DLF. "You could look for some buying opportunities in Unitech anywhere between Rs 460 and Rs 439. DLF is still strong and has not broken the listing day lows, which was around Rs 540-550. So, closer to those levels that also would be a buy," is his opinion.
Manghnani is also bullish on power stocks like Reliance Energy and Torrent Power.
"Torrent Power is showing quite a lot of strength in this market. It is trading above the Rs 85 mark and has headed towards Rs 95. I think Rs 99 is its all-time high, so still a lot of momentum left in that stock. Reliance Energy has been a front-runner in the last month towards the fag end of this rally up to 15,800. It moved quite sharply from Rs 600-800. Still a lot of strength is left and I look to buy into this stock somewhere between Rs 690 and Rs 676. In the range, I would look and buy into Reliance Energy. When the market bounces back, it should be one of the sharpest to bounce back," is his opinion.
Anand Tandon of Gryffon Investment Advisors feels that technology will outperfrom from here on. "I am looking at a scenario where the overall availability of capital is lower. Hence, I am looking for companies that have better use of capital, and IT falls into that category. The fact that the rupee has become weaker also helps. The business environment has been strong so far. I am assuming that it will continue to remain strong. If that assumption is tested we have to change our view but for the moment it looks like orders are not a problem. If margins get restored in rupee terms, then this is clearly one sector, which will outperform from here on," he feels.
Giving his opinion on the auto sector, Tandon feels, "In the near-term, the outlook doesn’t look all that bad. It has been a sector, which has somewhat underperformed. It is much less likely to get thrashed when the money goes out. Those stocks, which are over owned, fall first and we have seen that in the last few days. The near-term availability of money is likely to improve as a result of regulatory action. I wouldn’t be very surprised if the market becomes a little worse prompting the RBI to come back and cuts down CRR for instance. I think that’s a sector where one should be overweight on."
