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Frontline stocks still strong, say brokers

A survey said that even during periods of crisis, frontline stocks will be in a position to resist steeper falls and will be the first to recover, reports BS Srinivasalu Reddy.

business Updated: Jan 23, 2008 23:56 IST
BS Srinivasalu Reddy

Punters are betting on market surge ahead of a couple of milestones in the first or second week of February, mostly taking positive cues from the third quarter review of the credit policy scheduled for January 29, and release of funds locked in the Reliance Power and Future Capital initial public offerings (IPOs) a week later. However, they do not rule out a further correction from the present levels during the next few weeks.

Besides, broking houses also reiterated an age old stock markets principle - Even during periods of crisis, the frontline stocks will be in a position to resist steeper falls and will be the first to recover – in a poll conducted by Hindustan Times, by selecting several front line stocks as their picks.

India’s economic fundamentals continue to be strong and it is the best time to invest in the market to reap better benefits during 2008 and later, feel broking houses Religare and Centrum.

A Balasubramanian, Chief Investment Officer of Birla Sun Life Mutual Fund, said, “With the Q3 earnings in line with market expectations, the probability of the market taking a cue from the forthcoming (credit policy review) policy and moving up further is very high.”

Amitabh Chakraborty, President-Equity, Religare Securities responding to the broker poll on Tuesday said, “We believe this week the market will stabilise, and if the volatility gets softened, slowly the market will recover as the refund money from Reliance Power issue comes back to the system and the market builds on budget expectations.”

Devesh Kumar, Managing Director of Centrum Broking said in a note, that the threat being from external factors, the sectors affected by global slowdown are those companies having huge offshore order-book and those which cannot withstand dumping from other countries.

However, there is a lingering skepticism that the global worries may not subside so soon. VK Sharma of Anagram Broking is of the view that one has to wait and watch the trend evolving in the next three months.