Sensex can touch 12,000-12,500 in H1 2010

Sensex can touch 12,000-12,500 in H1 2010, can recover to 17,000 in H2; expect mkts to claw back before budget; momentum still strong for autos: Shankar Sharma

Shankar Sharma, VC & Jt MD of First Global said that emerging markets have not outperformed against S&P 500. Correlation between US and emerging markets is set to break. Case for emerging markets outperformance may not be as strong as robust as thought to be. He feels that emerging markets may lag US markets going forward. Emeeging markets have high beta, and they may fall more than US markets.

He further said that the rally in India was led by few sector, it was not broad based. He feels that Sensex can touch 12,000-12,500 in the first half of 2010, it can recover to 17,000 in second half. He feels that markets are unlikely to test the lows of 2008. Markets are unlikely to give up 9 month long rally easily. He expect the markets to claw back before budget. Current fall may not last for long. He expect 25% downside in the markets.

He remains negative on infra space but is positive on IT. He feels that infra sector will underperform going ahead. IT space is expected to do well on the back of strength in dollar. About auto space, he said that the momentum is still strong for auto space. Auto stocks can fall 20% after huge outperformance. He said that nothing is fundamentally wrong with auto stocks and are showing fatigue after big rally.

He said that Tata Steel’s rally was not justified on the numbers. Reliance Industries will outperform the the markets. Telecom stocks will not fall as much as other high beta stocks. He expect L&T, metals to lead the market fall. He feels that L&T and metal pack will lead 25% correction in the markets. L&T can fall 40-45% from current levels. However, BHEL may not fall as much as L&T. He feels that Punj Lloyd needs to solve legacy issues. JP Associates, HCC, IVRCL Infra are very expensive stocks. He is not a believer in Indian media sector.

No related posts.