Indian Indices continued their downward journey as they fell for the fourth consecutive session Monday with the Sensex shedding 155 points ahead of the central bank's first quarter review of monetary policy on July 30.
Investors' confidence has remained shaky since last Tuesday, when Reserve Bank of India announced additional measure to curb volatility in rupee.
The BSE Sensex closed at 19593.28 while the NSE Nifty fell 54.55 points to finish at 5831.65, as the cut got deeper in midcaps. The BSE Midcap Index fell 1.3 percent. Technical analyst Sudarshan Sukhani of S2analytics.com advised to go short on Nifty as it is caught in a downtrend.
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Most experts believe that RBI policy scheduled on Tuesday would be a non-event. "RBI would not take any drastic measures in terms of raising rates or any such action that would further weaken the economy. But it could take some temporary measures that it has been doing over the last couple of weeks," Gopi Suvanam, Founder, InvestWorks told CNBC-TV18. He stressed that there will not be any change in key rates at this moment.
Suvanam believes that RBI may give some comforting statements considering that there has been lot of hostility build around lack of transparency against RBI. "So to counter that I think RBI is going to give some kind of comfort to banks at least that these measures are not going to be permanent and they would relook at them at certain stage later on," he added.
Many state-owned banks like Indian Bank and Allahabad Bank today disappointed market with its first quarter earnings. Suvanam advised investor to stay away from public sector banks. "So I could make a tactical call to invest in some of these private sector banks, at the same time avoid PSU banks because they have a lot of issues like NPA and legacy issues," he said. He advised to invest private sector banks like IndusInd Bank , Yes Bank or Axis Bank for a short-term period.
Infrastructure company Jaiprakash Associate today reported 141 percent jump in net profit at Rs 334.5 crore due to an exceptional gain of Rs 395 crore on sale of JP Infra shares.
SP Tulsian of sptulsian.com is highly disappointed with results. The company's the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is entirely been eaten away by Rs 590 crore of interest and Rs 195 crore of depreciation.
"I don't know that from what parameters the results can be seen as positive or as good and since then the market has in fact been going up on the share but I see these results really very bad, very pathetic," Tulsian said. He added that the company's EBIT margin of 11.11 percent is probably the lowest when compared with the Ambuja and ACC.
If you have Rs 800 crore every quarter likely to go on interest and depreciation I don't understand that how company can really sustain in the next three quarters of FY14.
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In current downtrend, Suvanam asks investors to focus on sectors like pharmaceutical, which have not really achieved its peak yet. Among pharma, he prefers Cipla . Among technology stocks Suvanam advises to start building position on Tech Mahindra and HCL Technologies .
Among telecom he prefers Idea Cellular . "I will be positive on Idea going forward. I won't be really positive on Reliance Communications . We have to see what is happening to various newsflows that is coming. Telecom is a mixed bag. So, I would take it with a pinch of salt," he added.
Tulsian gave a long call for McLeod Russel in the last trading hour of market. "We have seen the numbers having posted by the company which are seen good. In fact the tea and coffee companies are posting good numbers. Tata Coffee has posted good numbers. So, some value buying is seen emerging on the stocks. So, go long with a target of Rs 291 and stop loss of Rs 285," he added.
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