Mumbai, November 21: On Wednesday, markets traded higher ahead of Cabinet meeting on divestment. The 30-share Sensex touched an all-time high of 40,816 while Nifty crossed 12,000 mark. Nifty crossed the 12,000 levels, ignoring a flood of negative reports about the Indian economy including banking, manufacturing, automobile, pharma, telecom.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Private Ltd, said that equity markets continued its positive momentum for second consecutive day with both Sensex and Nifty gaining nearly 0.5 per cent to close at 40,652 and 11,999 levels respectively on the back of positive domestic cues. Except PSU banks which saw profit booking, all other indices ended in the green led by the pharma, energy, infra and FMCG.
According to Santosh Meena, Senior Analyst, TradingBells, the market is at an all-time high but both macros and micros are not supporting the current bull-run where the current momentum in the index is majorly driven by global liquidity as global interest rates are falling”.
1) Santosh Meena of TradingBells said our top recommendations are ICICI General Insurance, State Bank of India, Divis Lab, PNC Infra and Cholamandalam Investment. Insurance space is showing lots of attraction where life insurance companies have done very well but the leader in general insurance space, ICICI General Insurance may outperform from here where any recovery in the auto sector will boost sentiment in this counter.
2) SBI is coming out of long underperformance to Bank Nifty after its Q2 results where there was a significant improvement in profitability and asset quality whereas the Supreme Court's verdict in the Essar steel case is attracting marquee investors to look value in this stock.
3) If the economy has to recover then the infrastructure sector needs to do well where PNC infra is our top pick as it has strong order book and management is confident about 50-60 per cent growth in FY20. It is also one of the preferred bet of many FIIs.
4) After a long period of underperformance Pharma sector is showing some signs of recovery. Last quarter was not so bad where one of the API player Divis Lab may continue its outperformance.
5) NBFC sector is most beaten-down sector in 2019 but there is still lots of growth opportunity in coming years where companies which have a strong business model and strong balance sheet may do very well in coming days and Cholamandalam Investment meets the required criteria for investment.