New Delhi, Feb 13: The market has a strong support level at 4250 and may remain range-bound as the forthcoming budget is not expected to be investor friendly given the need for raising more funds as a consequence of the Gujarat quake, says a SBI Caps research report.While stock valuations have improved significantly, most of the stocks are due for a correction, especially sectors like software and cement, the report says. A dip in the valuations may throw up some buying opportunities in software and telecom stocks, according to the report.
On the positive side, factors like subdued oil prices, falling global interest rates and increased spending as a fallout of the earthquake may boost growth in the corporate sector.
However, strong FII buying cannot sustain for long without retail buying support. "Given the devastating earthquake, emergence of a follow-up retail buying is suspect," the report predicts.
Given the current trend in steel prices, the reports says that fiscal 2002 is likely to be difficult for steel companies. Prices of HR steel products may come down due to the slowdown in US and increased anti-dumping litigation in that country. Last quarter has historically been good for steel companies and this year should be further helped by quake related demand from Gujarat. However, SBI Caps feels that metal stocks in general are now fairly priced.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
