Some 49 shares of the Nifty package lost weight in this sale. However, analysts see the drop as an opportunity to regain quality stocks.
“This is an immersion buying market,” says Nilesh Shah, MD and CEO of Envision Capital. “You need to keep accumulating a chosen set of stocks and keep building a portfolio with a two to three year outlook,” he told ETNOW.
The 50-share Nifty plunged 799 points to 10,805 on September 24 from 11,604 on September 16. Private sector lender IndusInd Bank plunged further to 21 percent to 490.20 rupees. They were followed by Tata Motors (19% less), Bharti Infratel (16% less) and Tata Steel (15% less).
“This type of decline always offers the opportunity to accumulate quality stocks with a long-term perspective. We are positive on Britannia, Asian Paints, Kotak Mahindra Bank and UltraTech Cement in the Nifty package. In general, the market is going to be volatile this year in the run-up to the US elections, ”said Sanjeev Hota, Sharekhan’s Head of Research.
Stocks such as Bajaj Finance, Hindalco, Bharti Airtel, Indian Oil Corporation, Zee Entertainment, Bajaj Finserv, Adani Ports, State Bank of India, Maruti Suzuki, ICICI Bank and Britannia all collapsed as much as 14% this fall.
“The IT and pharmaceutical spaces seem resilient compared to others. I will prefer Sun Pharma, TCS, Infosys, Reliance Industries, and Asian Paints after this fall. Banking and financial operations should be avoided from now on, ”said Ajit Mishra, Vice President of Research at Religare Broking.
In the latest projection for the banking sector, S&P Global Ratings said Thursday that the Covid-19 disruption and the 2020 oil price shock are severely affecting global banks. “Therefore, it will be difficult for them to return to pre-crisis levels in the next three years,” he said.
Sector-wise, the BSE Telecom Index fell 14 percent to 1,018 on Thursday from 1,181 on Sept. 16. Global brokers Macquarie and Credit Suisse are positive on Bharti Airtel with a price target of Rs 700, up 67 percent from the current market price of 418 rupees. On Friday, the shares were trading at Rs 432, an increase of 3 percent.
The industry came under pressure after billionaire Mukesh Ambani’s Reliance Jio on Tuesday unveiled new postpaid plans offering up to 500GB of data and subscription to Netflix, Amazon Prime and Disney + Hotstar.
The BSE Metal, Realty, Banking, Auto, Oil & Gas, Power, Capital Goods, Consumer Durables, FMCG, TECk, IT and Healthcare indices fell between 3% and 12% in this sale.
Vinod Nair, Head of Research at Geojit Financial Services, said: “Defensive sectors with a positive outlook such as pharmaceuticals, consumer goods, IT, chemicals and telecommunications will tolerate the negative market trend and recover strongly in the event of a rebound in the short term. ”
Dr Reddy’s Laboratories (up 8%) was the only winner in the index. The stock took center stage after the company said last week that it had settled litigation with a Bristol Myers Squibb unit over patents on Revlimid (lenalidomide) capsules used in cancer treatment. Broker Nirmal Bang Securities has a ‘buy’ rating on the major pharmaceutical company with a price target of Rs 5,656.
Mayuresh Joshi, William O’Neil’s head of research, advised caution. “One should wait a few more days before buying expired shares. This is the time to create a high conviction stock list, ”he said.
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