Stock Pick for 2010
The stock market in India is likely to extend its recent rally into 2010 but it is unlikely to repeat 2009′s spectacular rise. It is expected that the Indian economy will do well as well the corporate earnings will do well but one shouldn’t expect the market to rise sharply as was seen last year. The market will look forward to several issues that may dent the upward momentum. Issues like withdrawal of stimulus measures, bad monsoon, direct tax code implementation (as per the draft code) may pose an upper cap on the indices. But undoubtedly these issues won’t hamper the long term bull market trend and it will march ahead in the long term. 2010 may not see a new high but there is high possibility of market crossing 20000 mark this year.
One has to be cautiously optimistic while picking stocks keeping in mind the recent market mayhem which taught every investors and traders that only companies with good fundamentals, strong balance sheet with low debt component and strong order book has only been able to withstand and overcome the crisis. One has to keenly watch the Government policy and their disinvestment decisions.
PSU stock will be the flavour of the season if the Government fulfills the promises. PSU stocks has already rallied to a great extent and one must not jump into any such stocks without judging the valuations else there will be high chance of burning their fingers. Midcap PSU bank stocks like Dena Bank, Uco Bank, Indian Overseas Bank, Allahabad Bank, Central Bank still have some steam left in them and if Q3 and Q4 results are promising they may rally further. NTPC, REC, BHEL, BEL are some good long term pick among the PSU arena.
Telecom is expected to under-perform the bourses in the medium term and any correction sooner or later will bring those stocks at attractive buy levels for a long-term investment decision. Bharti, Rcom and Idea should be keenly watched as a value pick for long-term investment only after decent correction.
Power and infrastructure will continue to do well despite high valuations among front liners. LT, CESC one must closely watch and can be bought on every dip with good potentiality of appreciation.
And last but not least, Reliance Industries must not be overlooked and it must be noted that despite its gas dispute issue it has all quality to give decent returns and must form a part of a long term portfolio.
Happy Investing!
By TheStockWorld.com
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