The market gained for the sixth consecutive session today. The Sensex gained 85.03 points and ended at 18,902.41. The Nifty rose 35.70 points to close at 5,760.10.
In an interview to CNBC-TV18, Amit Dalal, Tata Investment Corporation says Obama's victory is not something that Wall Street will cheer a lot about. However, he says, the Indian market is performing on its own merit, own technicals. "For the market to ride further, ofcourse, we need more from the parliament and the government. But definitely the strength of the market remains for the time being," he adds.
In the last one year, Dalal says, the Sensex has gone up some 7 percent, whereas about 80 stocks, only in largecap space, with a market-cap of more than Rs 2,500 crore, have gone up more than 30 percent. "You have a basket of leaders now to choose from. Many of these companies are still available at less than 15 times earnings. I just urge people to look for these stocks," he asserts.
Meanwhile, Sudarshan Sukhani, s2analytics.com says for short-term trader, it is a very good time to take some profits off the table. "For anyone holding a position or building a position, we have a target of 6,000. This will not come easily. There will be ups and downs and pulls and pressures. So, volatility will have to be accepted. But if the trader is prepared to accept the volatility, I think position traders should hold on to their Nifty positions or even initiate them at current levels with the understanding that a 100-point decline can always come," he suggests.
Below is the edited transcript of Amit Dalal's on CNBC-TV18.
Q: How the market is headed from here, now that one more trigger is out of the way?
A: Definitely, in the US, Obama's victory is not something that Wall Street will cheer a lot about because they were rooting for Romney now for almost two-three months. There is going to be taxation issues, which will come on the fore, in the next couple of months. Those issues are something that the Wall Street has been ignoring and trying to see that it perhaps will go past, but that is not going to be the case. Therefore, those markets will remain under pressure in terms of participation and any upside.
I think our market, to a large extent, is performing on its own merit, own technicals that have become so strong because of the buying that has taken place in the last 10 months in India. The last 500 points is the Chidambaram effect. That Chidambaram effect is very strong in our market. For the market to ride further, ofcourse, we need more from the parliament and the government. But definitely the strength of the market remains for the time being.
Q: How would you approach the IT stocks? There was anti outsourcing stance that Obama had. There was a fear that if he comes back into power there will be negative impact on many of these IT companies. Would you worry at all or will it just be discarded?
A: I do not think so. I think that has been talked about, since the previous elections also, when Obama was elected. There was a huge fear at that time. At that time, the need for their economy to get that support was even larger than it is today. But the IT space, especially the large IT companies, is concerned, if you analyse the first two quarter results, a substantial improvement in their earnings has also come because of the effect of currency in their favour.
Going forward, if we truly believe that our market is going to be strong and we believe that commodities are going to be weak, the weakness in our currency and perhaps the pressure on current account deficit will be a lot lower. That may not allow us to give higher growth of earnings for '13-14 for IT companies. That means that these shares will not perhaps go up substantially from here.
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