Why experts are bullish on these 5 stocks during volatility

The BSE Sensex and NSE Nifty gained around around 2.5 per cent last week supported by positive macro economic data and US Federal Reserve decision not to raise the interest rates. According to market experts, the outcome of events and data during the last few weeks have raised hopes among the participants for a rate cut in RBI’s September 29 monetary policy review, clearly reflected through the recovery in banking space. Besides, rotational buying in other sectors also aided index to sustain at the higher level.

The BSE Sensex and NSE Nifty advanced 608.70 points and 192.60 points to 26,218.91 and 7,981.90 on September 18 from 25,610.21 and 7,789.30 on September 11. Barring the Consumer Durables index (down 3.30 per cent), Capital Goods index (down 2.41 per cent) and Auto index (down 0.43 per cent, rest all other sectoral indices on the Bombay Stock Exchange ended last week in green. The BSE Bankex jumped the most— 5.05 per cent at 19,952.94, it was followed by BSE Power index (up 3.72 per cent), BSE Realty index (up 3.72 per cent) and BSE Healthcare index (up 3.06 per cent).

The Sensex was trading 110.65 points down at 26108 in the noon trade today. Nifty was also down by 32 points at 7,950 during the same time.

Though there is no major data lined up this week but Jayant Manglik, president, retail distribution, Religare Securities believes that the market may remain volatile as traders will roll over and unwind their positions in the futures & options (F&O) segment, because of scheduled derivative expiry of September month contracts on Thursday. Further update on monsoon and currency move would also influence the domestic bourses to some extent so traders should keep an eye on them for further cues.

The US trip of Prime Minister Narendra Modi too will be in focus this week, as he will meet chief executives of more than 35 companies in New York on September 24 to push ‘Make in India’ agenda.

Manglik, said, “The only concern that we have now is lack of broader participation which is indeed essential for markets to march further northward and sustain at higher level. If things fall in place, Nifty has potential to retest 8,200 mark in the coming sessions. Considering the prevailing scenario, we suggest traders to maintain positive yet caution approach and keep trailing stop losses with every rise. For investors, we uphold our advice to gradually accumulate quality stocks from private banking, NBFCs, auto, capital goods alongside with IT and pharma.”

Nitasha Shankar, VP research, YES Securities, said, “Uncertainty will continue till the next Fed meet which will keep upside capped in our opinion. As for the Indian markets the next event that investors would be eyeing will be the RBI meet. A rate cut would help in reviving the positive sentiment.”