Is This Right Time to Invest in Stocks?

On Monday, the Indian equities saw a sharp fall which saw a choppy trade on Tuesday. The buyers also lacked confidence because of Europe’s sovereign debt concerns. The session ended on a flat note which saw the Nifty at 5,398, higher about 12 points, while the Sensex closed at 18,011, up about 18 points.

In the fortnight gone by, we saw petrol prices being hiked in line with expectations. However, the prices of diesel, LPG and kerosene have been left untouched. Any change in the prices is likely to impact inflation.

Also, quarterly earnings of major companies failed to meet market expectations. In fact, they have been quite disappointing so far.

Furthermore, the previous fortnight also saw a correction in the prices of commodities like metals, oil and cotton. Although this correction in commodity prices will be a positive in the long-term, in the short-term, however, it can have some negative impact owing to inventory valuation losses.The markets are highly volatile at present.

Market participants are advised to avoid fresh buying and overnight positions as the Nifty is under pressure and FIIs have been selling. I expect the Nifty to touch the 5,350 level. If it crosses the 5,480 level, then it is likely to test the 5,600 level.

We expect the market to be in the range of 5,200-5,600 for the next few days. When the momentum stocks will upto 3-4% from here on would be a good entry point. The consumption theme like an ITC, Marico and something to do with fertilizers like Coromandel Fertilizers would be a good picks at this point of time. A lot of things will also depend on the monsoon going forward.

Stocks for Investment: National Peroxide, Tata Consultancy Services, LIC Housing Finance, Hindustan Zinc, Grasim Industries and Sintex Industries look good on declines from an investment perspective.