The Indian stock markets are soaring like there is no tomorrow. Starting at 13,000 in the beginning of this year, the Sensex crossed 20,000 by October.
Will the Sensex sustain the gains or will it go down again?
Where is the stock market going? Will it rise further? Or will they crash again? What should a small investor do in such a scenario? Should he hold on to his stocks or sell them? Should he buy stocks now or stay away from the market?
Market expert Pranav Sanghavi answered many such readers' queries in an hour-long chat on Wednesday. Here is the transcript:
PRANAV SANGHAVI says, Good afternoon every one. Hello and welcome to the chat. Let's begin.
karan asked, Hi Pranav, Good afternoon the markets now seem to be consolidating... what do you feel?
PRANAV SANGHAVI answers, at 2007-11-21 12:03:08Yes i think they should move sideways for some more time before they resume their upward movement. There could be a minor correction also. But beyond that markets look to rise.
karan asked, which stocks could be looked at these levels for a 6-12 month outlook...
PRANAV SANGHAVI answers, When the markets correct I would pick stocks like L&T, RIL, SBI, DLF, IDFC, NTPC etc.
karan asked, some IT stocks seem to be very attractive at the moment. should i wait for some more correction in stocks like INFY, Wipro, TCS, etc or shall i start buying in small numbers... what r your favorite IT picks for long term investment... i can wait for some more time also for investing but fear that the levels might go up a bit... could you please suggest?
PRANAV SANGHAVI answers, Yes they are at extremely attractive valutaions if you look at thier histoircal PE multiples. But one can't forget that the dollar looks to slide further with the huge inflow of funds India is witnessing. This willcontinually dampen the tech sectors performance. I like all the three stocks you mention but I would not be in a hurry to get in right now.
karan asked, please give your top picks from the banking sector
PRANAV SANGHAVI answers, I like SBI, HDFC, ICICI, Uco, Dena, and some more midcap banks who look to give good results for FY08.
karan asked, please tell good websites and/or softwares related to Indian stock markets
PRANAV SANGHAVI answers, At the very high end you could look at a Bloomberg terminal. At lower end the NSE, BSE, Moneycontrol sites are pretty decent.
ravii asked, Hi sir i want to become professional in stock market plz suggest me some study material to become expert thx
PRANAV SANGHAVI answers, You could take up courses both basic and advanced offered by BSE and NSE's training Institutes. Also, ICWAI has a course specifically on Stock Markets and also NMIMS a year or so back has started an MBA course with Stock Markets as its core focus.
ravii asked, Hi sir i hve invested in TCFC Finance Ltd @61.95 for 100 shares & Lincoln Pharmace 100 shares @ 7 Rs Plz tell me feuture of this shares thx
PRANAV SANGHAVI answers, If you are making profits I would suggest you book them.
SHANE asked, WILL RPL AND RNRL COME DOWN FROM NOW OR WHEN THERE WILL BE THE NEW IPO ON RELIANCE POWER
PRANAV SANGHAVI answers, They had moved up tremendously over the last few weeks. So a marginal correction or consolidation is good for the stock. RPL on a longer term should give you good returns but beyond 1 year horizon.
SBRAY asked, WHAT WILL BE SHORT TERM TARGET OF JPHYDRO?
PRANAV SANGHAVI answers, I think the company is in a fixed price business of hydro power. They have long term fixed rate contracts. So I feel beyond a point the stocks is a bit over valued. One could surely take some profits off the table. Higher prices willdepend on their expansion plans.
SBRAY asked, WHAT WILL BE SHORT TERM TARGET OF JPHYDRO?
PRANAV SANGHAVI answers, I think the company is in a fixed price business of hydro power. They have long term fixed rate contracts. So I feel beyond a point the stocks is a bit over valued. One could surely take some profits off the table. Higher prices willdepend on their expansion plans.
po asked, Can I enter Power Grid at these levels ?
PRANAV SANGHAVI answers, You could look at the stock with a long term perspective. But get in on dips and corrections.
po asked, Can I enter Grasim at these Levels ?
PRANAV SANGHAVI answers, You could look at Grasim too with longer term outlook. It is a strong player in the cement sector and the demand for cement doesn't look to die down even beyond the next 2 to 3 years considering the huge infrastructure development in our country.
po asked, Please suggest some good small caps
PRANAV SANGHAVI answers, That question is more of a paradox. Be very careful and study the stock twice before entering the fast rising small cap stocks.
hsshukla asked, Pranav do u recommend to purchase ISPAT and IFCI at this level?
PRANAV SANGHAVI answers, You couls lood at IFCI if it corrects by around 20% but I would stay clear of Ispat unless there is official news about the company.
ushinor asked, Hi, how do you rate hindal co at this level
PRANAV SANGHAVI answers, It is a decent stock but witha long term bet. You would need to hold it for atleast 1 to 2 years.
Megastar asked, What are the prospect of Unitech, GMR Infra and Magnum ventures ?
PRANAV SANGHAVI answers, Unitech and GMR both are good long term bets. THey have large projects on hand and under development.
JO asked, Hi Pranav,I have 10 BajajAuto @2340,150 RPL @260,10 Airtel @942 your long term and short opinion on these,also which are the other hot picks in your view...thanks
PRANAV SANGHAVI answers, Bajaj Auto will really spurt when the interest rates begin to go down. Iwas expecting them to come down this last quarter but with the excess liquidity inthe marekt the government cannot afford to reduce interest rates. Somay be some time next year.
Megastar asked, What are the prospects for Sunflag iron, HFCL and Tatapower ?
PRANAV SANGHAVI answers, From the 3 you mention, I would only holdon to Tatapower. That has the best prospect for the next few years.
ARUN asked, Pranav do u recommend to purchase ISPAT and IFCI at this level?
PRANAV SANGHAVI answers, No.
Megastar asked, Where can we see Laxmi machine Works from here ?
PRANAV SANGHAVI answers, The equity is extremely small and very low floating stock too. Therefore the stock always has a perceived supply shortfall. So the stock always quotes higher than market PE multiples. But it should continue its good run.
kalyan asked, Hi pranav good afternoon. can i enter IOB,NTPC,POWER GRID at these levels . pl suggest
PRANAV SANGHAVI answers, I would suggest IDBI instead of IOB and yes NTPC and Power Grid could be looked at every dip.
mat asked, how abt religare?
PRANAV SANGHAVI answers, Religare has listed at a substantial premium to its market price. It looks fairly valued at 575-600. I would now wiat for the next few qurters.