Market enters trading zone again

Fri, Jul 25 01:00 AM

Banking, capital goods and infrastructure are poised to remain darlings of investors in the coming sessions of trading on the stock markets, now that the political uncertainty is over and it is business as usual. If the market trends on Thursday are anything to go by, the party has already started.

Reliance Natural Resources, Indiabulls, Kotak Mahindra, HDFC and ICICI Bank were among the top stocks, which gained more than 10 per cent in a market overwhelmingly positive in breadth. "We are back from the days of political uncertainty, and the market can enter a trading zone now," said Arindam Ghosh, head, Asia-Pacific, Mirae Asset Management.

"We see FII interest coming back into the markets soon." The top 15 performers in the BSE Sensex contained five banks, four metal stocks and three engineering companies.

Other movers were real estate and Reliance stocks with interest in energy and natural resources. "We believe companies that can leverage the economic situation and pass on their costs to consumers to be the best bet," said Rajiv Sampath, independent market analyst, who helps manage a top broking firm.

"These would include fast moving consumer goods and some IT stocks for companies who play the currency situation well." Lehman Brothers, one of largest US banks, has said that there are expectations of economic reforms in areas that were earlier opposed by the Left parties.

These include a hike in foreign direct investment (FDI) limit in the insurance sector to 49 per cent from 26 per cent and allowing foreign investors voting rights in proportion to their equity holding in banks from the current cap of 10 per cent. Passing the Pension Fund Regulatory and Development Authority (PFRDA) bill, that allows private sector more participation in the pension sector and disinvestments in public-sector companies, could help ease the worsening fiscal position, said a report from the bank.

RECOMMEND THIS STORY