Market gurus expect a rebound soon

Equity markets fell sharply on fears that the political developments between India and Pakistan might escalate further into a war-like situation

The message from market gurus, post the steep fall witnessed on Thursday is clear: Use the correction to buy into good, quality stocks. Equity markets fell sharply on Thursday fearing that the political developments between India and Pakistan might escalate further into a war-like situation. However, this fall was aggravated by the fact that Thursday was also the day of expiry of futures and options contracts. Nirmal Jain, chairman and managing director of India Infoline Finance, says, “Market needed a reason to correct as it had risen significantly.”

While there is no certainty on how the political matters will develop, the markets are likely to remain volatile till the political situation achieves some certainty. S P Tulsian of sptulsian.com, says, “Even though volatility will continue for a few days but markets will stabilise soon. Investors should buy companies, which are likely to post good Q2 numbers in the agrochemicals, transformers and auto ancillaries sector.”

Amongst key sectors, those focused on the domestic sector should do well. Rakesh Arora, an independent market expert, says, “Our economy seems to be going from strength to strength and global liquidity position is good. Investors should focus on domestic-based sectors such as industrials, a few consumption names, which have fallen and pharma companies.”

Ajay Bodke, chief executive officer and chief portfolio manager (Portfolio Management Services), Prabhudas Lilladher, is bullish on consumer-focused sectors such as automobile, banking and financial services, cement and fast-moving consumer goods.

“We are positive on Maruti Suzuki, Tata Motors, IndusInd Bank, HDFC Bank, YES Bank, Britannia, ACC and HeidelbergCement,” he adds.

While most experts believe markets should stabilise from here on , some are more cautious. Sachin Shah, Fund manager, Emkay Global Financial Services, says, "Though immediate upside seems to be capped, there is enough buying interest at the lower level. We expect the Nifty to remain in a narrow range of 8,400-8,600. We like auto and auto ancillaries, banking and financial services and the power sector."