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Hemang Jani, Senior Vice President, Sharekhan, feels though the sentiment is weak now, but he advices to play for a pullback, which could take the market to about 11,000-12,000 levels. Meanwhile, Suhas Samant, Head-PMS, Asit C Mehta said his present investment philosophy is purely being at higher levels. One must exit the largecaps and cover it at lower levels, he feels.

Hemang Jani, Senior Vice President, Sharekhan said though the sentiment is weak now, but it will make sense to play for some kind of a pullback from current levels and there are two basic triggers that one could look at.

Firstly, there could be some kind of an easing of the redemption pressures coming from the long-only funds and some of the offshore funds. Secondly, one could see one more round of easing by the Reserve Bank of India (RBI). Thus, one should play for a pullback, which could take the market to about 11,000-12,000 levels.  

However, there could be some kind of non-performing loan (NPL) concerns over the next two quarters, as the real impact of this entire tightening and the slowdown could be felt and particularly the real estate sectors could see some kind of a negative sentimental impact in terms of NPLs.

For a pullback, we would be more comfortable buying into some of the known largecap names like Reliance Industries, Larsen & Toubro, BHEL, Bharti Airtel and to some extent State Bank of India. As these stocks would give a pullback of about 15-20%, so it makes sense to play through these stocks.

Also, some of the power generating companies which have fixed return on equity like 14%, companies like NTPC and Tata Power would be relatively better place because of that fixed return that they would get. But companies which are into manufacturing of equipments or which have a huge capex lined up these companies would continue to remain under pressure.

Meanwhile, Suhas Samant, Head-PMS, Asit C Mehta said his present investment philosophy is purely being at higher levels. One must exit the largecaps and cover it at lower levels. “We are still experiencing the pressures in heavyweights like Reliance, Bharti, HDFC and even all private sector banks. The view with respect to investments is purely into the PSU banks and PSU companies like BHEL, BEML wherein orders will keep on coming with these companies.”

According to Samant, the most important thing is that finance will be available from the PSU banks at much cheaper rates as compared to the private players.