Indian markets have fallen over 600 points in the last three trading sessions. The Budget disappointed the Street with most analysts terming it as a ‘non-event'. The fiscal deficit target looks ambitious given that there is no roadmap to reduce the burgeoning subsidies.
Deven Choksey, MD of KR Choksey Securities told NDTV Profit that markets have not lost track and the next up move would come after a consolidation. "Nifty should be a buying opportunity closer to 5,200 levels and the upward journey would be between 5,500-5,600 in the coming days," Choksey added.
Market outlook:
If fuel prices go up (petrol, diesel and LPG), there would be some impact on inflation but it will be a near term positive for markets. The possibility of government raising petroleum prices will encourage the RBI to reduce rates because the deficit would come under control. Reduction in interest rates is a key trigger for markets. Reliance Industries will be key driver for markets.
Stock picks:
1) Reliance Industries:
The stock hit a low of 750. The buyback price is at 870. It cannot languish at lower levels for a long time. Gas related issues have been factored in. Buy with a target of 805-810 in 1-2 months.
2) State Bank of India:
The RBI has started releasing liquidity into the system and rates are likely to come down. Buy for long term with a target of 2,550.
3) Bank of Baroda:
Valuations are attractive. Buy with a target of 950.
4) ITC:
It is a defensive play and there have not been many negatives in the Budget. A technical short covering is likely to take place. Buy with a three month target Price of 240 per share.
5) IDFC:
Buy at 120 levels for a target of 180 per share.
6) Midcaps: Buy Adani Port, Power Grid.
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