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Industrial Products India, Industrial Manufacturers & Suppliers


Improved macro fundamentals

Improved macro fundamentals may drive market up: Deven Choksey, KR Choksey Securities

Just one quick word really on the markets. Do you think we could crack further and there will be better levels to buy or you think this is a good enough opportunity after the kind of fall that we saw yesterday?

Deven Choksey: Well, I find that the market is largely behaving on predicted lines and that is a happy sign actually. Yesterday the market fall was largely driven by the possibility of collateral damages coming in from the Japan fall and that is where I was very clear that the things could possibly reverse very sharply.

Another reason was the crude oil prices are expected to fall. When crude oil price is going down, it could possibly have its impact on the commodity prices and also on the gold pricesand should this thing happen, which gets validated over a period of time, then in such a situation my reading says that the flow of money would come in the market at a greater speed and elevated rupee at around 55.5-56 levels is an invitation for those people to allot more funds to India.

Given that possibility I was of the view yesterday also and this morning also that 5930 could be a level at which the Nifty would accumulate buying support and that is what we have seen validated in market has moved up.

I believe that 6050 is a first target which market could possibly see and whatever the fall in the crude oil prices given with the possible reduction in current account deficit takes place, it could possibly invite more amount of liquidity into the market and it can go up. So I am relatively more confident that 5900-6100 is a band in which market could behave properly.

To break above that level it will certainly require some of the macro fundamentals, including the fall in the crude oil prices, and that could possibly drive the market up. 

ET Now: There are some chinks appearing in the armour of pharma. Wockhardt, 14-14.5% today, 20% yesterday, have you done an impact analysis, is the correction good enough or can it do more? 

Deven Choksey: The corrections are a little bit faster and they are sharper as well. From that perspective if you look at it, probably the market would have factored the full impact in the corrected prices as I would call it. However, the uncertainty till such point of time is going to remain as an overhang in the market and that would prevent further upside in the market.

So in my view point, considering the fact that market would have completed the full correction by now or maybe a little left, in fall it could be a buy opportunity but at the same time headroom would be limited. So any recovery would also invite profit booking at such a point of time.

I would typically play around in this market till such point of time we get a clear-cut understanding on how the market direction is moving. Till such time we are seeing the narrow range-bound movement, I would play around with some of the pharma names like Ranbaxy and Wockhardt. Ranbaxy under counter can be bought at the lower levels and sold a little higher in the rally. 

ET Now: What is the call on Sun Pharma now on the back of results and also the talk of acquisition? 

Deven Choksey: It remains the favourable pick. The company remains quite positively placed, as I would call it. Of course, it is driven at a higher level of valuation, but any positive news probably supports that valuation, the one which is possibility of the acquisition.

So all of those probably go well with the company. They have proven track record of acquiring companies and putting them on to stream at much better pace than many other acquires in past who had not been able to do so.

So from that perspective, I think that there is relatively less amount of possibility of the stock price going down. Any corrective fall in the stock price could be a buy opportunity in this counter. 


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