Indian share market benchmarks BSE Sensex and Nifty 50 have tumbled over 7 per cent from the all-time highs touched in mid-February 2021. Markets have been reeling under pressure due to rising US 10-year bond yields. Sanjiv Bhasin, Director, IIFL Securities Ltd, told Surbhi Jain of Financial Express Online in an interview that higher yields will help banks to lead the gainers pack, while technology stocks on Nasdaq will witness profit booking. He said that the Nifty 50 index may find support around 14,300-14,350 amid volatility, while it will face resistance at the 15,200 level. Sanjiv Bhasin shared a few trading ideas for the coming first quarter of the next financial year. Here are edited excerpts from the interview:
1. Amid current market scenario, what are your support and resistance levels for Nifty 50 and Bank Nifty in the near to medium term?
Nifty finds very strong support around 14300/350 & faces resistance around 15200, while Bank Nifty finds strong support around 33250 & 35500 will act as resistance.
2. Spike in US bond yields spooked investor sentiment. What should be investors’ strategy? Should they use it as an opportunity, be cautious or wait for the further downside?
There are inflationary expectations that have seen bond yields spiked in the US. Also, the large US$1.9 trillion stimulus will see huge borrowing by the Federal Reserve. This is to be taken with a pinch of salt as short term there can be the repatriation of risk on money back in the US. But in the medium-term, it indicates the growth momentum is very strong which shows US banks come out of 3 years of low yields and now will reap the benefits of higher yields which will see banks lead the gainers while technology stocks on the Nasdaq see profit booking. Emerging markets have already seen profit booking but financials will see huge outperformance as higher yields will see more margins with this being a great opportunity to diversify into banks and NBFCs from select IT and digital plays.
3. What are your top trading ideas for the April-June quarter of new fiscal?
The top trading ideas for the first quarter of the new fiscal year are State Bank of India (SBI), ICICI Bank, Godrej Properties Ltd, HCL Technologies, Sun Pharmaceutical Industries and Bandhan Bank.
4. What should investors do with PSU stocks on divestment hope?
PSU stocks are a great play, as after four years of non-performance now look set to outperform in 2021. The top PSU stock picks are BHEL (Bharat Heavy Electricals Ltd), BEML Ltd, Container Corporation of India Ltd (CONCOR), NBCC (India) Ltd and Hindustan Petroleum Corporation Ltd (HPCL).
5. Besides, grey market premium, people look at IPO subscription status, is it enough to ascertain listing gains?
This has been the recent elephant in the room with a beeline to buy on listing for quick returns, with most having burnt their fingers. Returns disappear as fast as they came with select new listings seeing too much froth–Be watchful.