Two days after the Sensex conquered the 19,000-mark, it was bloodbath at the stock markets on October 17.
The Sensex plunged by 1,743 points, the largest fall in a single day ever witnessed in the history of the Indian stock markets.
Why did the stock market crash? Is there any reason to panic? Will the Sensex sustain the gains or will it go down again?
Were you hit by the Sensex crash? What should your investment strategy be now?
Should you invest more in the market? Or should you consider selling stocks? What would be the best stocks to buy, sell or hold at this juncture?
In an hour-long chat on rediff.com, market expert Pranav Sanghavi answered many such readers' queries. Here is the transcript:
PRANAV SANGHAVI says, Good afternoon everyone and welcome to the chat. Let's begin.
mona asked, im a long term investor & can wait for 20 & above years. Pl suggest me the best stocks for longterm
PRANAV SANGHAVI answers, at 2007-10-18 12:04:37: I would go with the frontline large cap stocks like RIL, SBI, L&T, Bharti, DLF etc. Also, you could look at investing in ULIP's and MF's with that sort of time frame the returns from these investments are pretty good.
kk asked, Hi Pranav, The finance ministry seems to be really concerned about the way the markets are going. what do you see in near future? will the markets correct a bit more before again going up?
PRANAV SANGHAVI answers, Yes they are concerned at not only the rate at which funds are flowing in but also the quantity of funds that are coming in to India. They are marginally concerned about the source of these funds also. Putting all this into perspective they should come up with some regulatory changes to monitor and curb the inflow of funds into India. But banning Participatory Notes and that too after18 months will not solve the problem. As that is enough time for these savvy investors to find alternate discreet methods of investing in to India.
kk asked, last week I sold whatever I had. shall i buy something now or wait a bit more?? please suggest a few picks to be looked for?
PRANAV SANGHAVI answers, You should have bought yesterday when the markets fell to the lower circuit. buy only on corrections. Fresh positions at these lofty levels could prove to be dangerous.
Pravin asked, Hello what is your view on RPL, RNRL and Reliance pack?
PRANAV SANGHAVI answers, The whole Reliance pack from both factions are witnessing unprecedented gains as is the market. I think they will continue their upward trend albeit after a pause or a minor correction.
anish asked, what will be the trend in sensex in the coming weeks till Dec '07?
PRANAV SANGHAVI answers, I think they should remain volatile for a while and post a correction the markets should move upwards.
Pravin asked, Sir, what price we look in ABB, L&T and BHEL to buy?
PRANAV SANGHAVI answers, When they correct by atleast 10 to 15% from current levels.
amar08 asked, I have shares of infosys at 2060. Whether infosys may go above that and if then in what time ?
PRANAV SANGHAVI answers, Just today TCS announced a large order that they bagged and their stock has moved up. Similarly, Infosys could jump up if there is some news flow on the stock. Otherwise the IT sector will remain laggards asthe Rupee continues its appreciation.
yesh asked, MRTPC holds DLF guilty for unfair trade practice.. what will be the impact on its share price?
PRANAV SANGHAVI answers, I don't think it will have a major impact. I would continue to stay invested in the stock.
arun asked, can v buy shares in this situation
PRANAV SANGHAVI answers, I would not. One could enter at dips or corrections with a longer term view but the markets will remain volatile for a while.
ROHIT asked, Is RPL a good buy at current lower as a long term investment
PRANAV SANGHAVI answers, I would look at it on the days the markets correct. The stock movesdown but marginally on those days. But with a long term view yes you could look at the stock.
goanspider asked, Hy when is the right time to invent in mutual funds is it now when the market is 17k
PRANAV SANGHAVI answers, It depends on your time frame for investing in the MFs. But if you do invest at the time of a correction or shortly thereafter you will tend to pick them up at slightly lower NAVs.
Rajesh asked, What is your view on Punj Lloyd? Does it have ability to reach 550-600 levels?
PRANAV SANGHAVI answers, Yes but hold it with a longer term outlook of 6 to 12 months at least.
pavan asked, I have 2000 shares of panoramic universal bought 7 yrs ago(erlier known as chitaliya corporate services,IT microsystems), please advice if i keep them for couple of years or sell it down, thanks.
PRANAV SANGHAVI answers, Sorry I don't follow that stock.
Mohit asked, I Buyed JPHYDRO 200 shares @ 76.85...is it okay if i put for a long term..or..
PRANAV SANGHAVI answers, There is a lot of interest into that stock from various retail segment. But according to me the company is in to a very fixed rate based power projects and their realisations cannot givequantum jump in income and profits unless substantial further funds are invested in expansion.
raveesh asked, When will Reliance Power IPO come? Whether I should invest in RPL, RNRL, Powergrid at present level? Is there any possibility of market down?
PRANAV SANGHAVI answers, Yes the markets are at lofty levels, I have been saying from 17,500 levels but now the markets are even higher. I would not make any substantial investments at this juncture.
savitha asked, hello, Is it right time to invest in equities?
PRANAV SANGHAVI answers, Enter when there is a correction. But I am surely bullish on equities as an investment class for atleast the next 4 to 5 years.
StockGuru asked, Can I short this market.
PRANAV SANGHAVI answers, Thats a personal call you can take. There will always be two sides toa coin. But unless you have deep pockets one must not go against the momentum.
chanda asked, should i buy rnrl at the current price or should i wait forthe prices to fall?
PRANAV SANGHAVI answers, I would wait for the market to fall especially the second tier stocks.
gauravbe asked, what is the short term and long term target of powergrid? Should I hold for short term?
PRANAV SANGHAVI answers, I would hold it for a long term. It is a quality stock which was underpriced and now the stock is discovering its true value post listing.
eswar asked, Hi Pranav yesterday's fall has clearly shown that the market is dominated by FIIs.If there is complete pullout by FIIs where do you expect the levels of sensex to be? Is really money laundering happening there in the indian markets?I really doubt the markets are not reflecting the real country's growth?
PRANAV SANGHAVI answers, First of all all FII's are not investing with a short term view on India. It is mostly the Hedge Funds which look for absolute returns which causes the big jumps either up or down. I think the regulators are trying to address these funds and not the long term FII investors. So I don't think that all FII's will pull out at one time. Also the amount invested into India is not even penny change when you compare the funds under management of these FII's. Thirdly, I think the insurance sector is gaining momentum and could absorb a decent amount of FII sell off if there is one. but yes the fact remains the FII's are controlling our markets currently and they are the biggest force inour markets.
StockGuru asked, Can u tell me whether Advanta and monsanto are good shares to invest now.
PRANAV SANGHAVI answers, Yes they are into agri related businesses and our agri sector looks to be growing handsomely.
sumanth asked, well i exited from the market on monday. Is it a good time to reenter
PRANAV SANGHAVI answers, You could ride the momentum in the frontline stocks but any major investment should be made during dips and corrections like we witnessed yesterday.
James asked, Hai, I would like to invest Rs.20,000/- per month in ShareMarket for 5 years to build wealth for daughter & son after 20 years. Hardly I have two/three hours a week can spend to study market in that week. plz suggest some MF's or share where I don't have do spend much time . Thank you
PRANAV SANGHAVI answers, I would strongly suggest you take on Unit Linked Plans which and take the equity option and also some large cap diversified growth funds like DSP Tiger Fund, HDFC Growth Fund etc.
preeti asked, Hi pranav. I am new to stock market and hardly have any knowedlege about it. Can u please tell me is it aright time to invest in market and which are the safest & cheapest stock at this moment.
PRANAV SANGHAVI answers, Hi Preeti, I would suggest you take on courses offered by the training institutes of BSE and NSE. Also it is not advisable to invest at times of heady bouyancy but at times of dips and corrections. I would look at stocks like SBI, L&T, Power Grid, DLF, NTPC, IDFC amongst a host of others.
raj asked, hi
PRANAV SANGHAVI answers, Hi Raj. I just gave a few shares you could look at. But there are lots of more opportunities to invest in. But invest at corrections in those quality stocks.
priya asked, I have 1000 shares of remi metals bought @16/- in 1996. please advise what should i do, sell or keep it for some more time?
PRANAV SANGHAVI answers, If you are in profit book it and swith to a quality metal stock like SAIl, Tisco or Hindalco.
yogeesha asked, when will this bull run stops?
PRANAV SANGHAVI answers, Most people would not like it to end. But I think if all things remain constant then atleast for another 4 to 5 years. I would also say till our corporates keep performing and show the growth rates they have in the past.
shruti asked, i an new to the market and have arnd 25,000 to invest. can i invest at this point in shares like powergrid, reliance petro? plz advise.
PRANAV SANGHAVI answers, If you are investing with a long term view you could. But on days like yesterday when there is a correction or dip.
parvez asked, Can you share your targets on Cairns India, Idea Cellular, ICICI Bank & UCO bank?
PRANAV SANGHAVI answers, I am bullish on ICICI, Idea and Uco Bank. I would say a 25% to 30% return over the next 12 months could not be ruledout.
sss asked, Should i buy gmr infra at these levels?
PRANAV SANGHAVI answers, i would wiat.
Avinash asked, Hi I wish to invest in MF , I have some MF like DSP TIGER , Magnun Contra,reliance vsion already , these fuds shows good growth , do you suggest what is the right time in coming days to invest in these same MF, is market will be corrected or just up & up
PRANAV SANGHAVI answers, No market can move only in one direction. But on a longer term we are in a bullish phase and as I have said in the past, timely corrections are part and parcel of the game.
KUMAR asked, Hi good morning Sanghvi saheb, i invested in infosys and suffered loss, can i sell those stock and reinvest in RPL at the present rate?
PRANAV SANGHAVI answers, The two stocks are in diverse sectors. The IT sector looks to remain laggard and would move only on newsd based jumps. Where as RPl looks to start its commercial production earlier than scheduled. So you could look at it.
Monu asked, Should I invest in Idea @ 150/- for long term and Powergrid @ 170
PRANAV SANGHAVI answers, You could look at the stocks but Power Grid is quoting lower I think.
KUMAR asked, When WELSPUN gone public, i was allotted 100 shares. After that so many changes in the company taken place and shares were exchanges in their new group of companies. I actually don't know how much share equivalent i got now becasue of loss of correspondance.. How should i go about it?
PRANAV SANGHAVI answers, Write to the company or check with your stock broker. Both should give you the correct information.
ds asked, should i invest in patel engineering / icra at this level for 1 years perspective for maximum return.
PRANAV SANGHAVI answers, ICRA could be looked at. Instead of Patel engineering I would look at L&T or Bhel.
Gopal asked, Hi Pranav, I want to invest for a short time, which will provide me good returns, where should i invest??
PRANAV SANGHAVI answers, In the frontline stocks in the infrastructure, real estate, cement stocks.
hivik asked, what r ur opion abt reail industry? what stocks can u suggest in that? how abt pantaloon
PRANAV SANGHAVI answers, I think till there is a clear outcome of the FII investment into retail segment the local players will continue to perform. Pantaloon should continue to perform as should Provogue.
shalit asked, mkys touching new highs every day, apart frm the risk profile, is it good stratedy to buy with say 10-12 profit profit then sell off
PRANAV SANGHAVI answers, If you are very strict with booking profits and losses then it is a good strategy to trade with a short term view with that strategy. But you have to keep various other factors in mind in terms of which group the stock belongs to, what is the volumes on the stock, what is the sector the company is in and more.
ps asked, Is ICICI bank good to enter at these levels ?
PRANAV SANGHAVI answers, Yes I am bullish on ICICI and you could look at it with longer term view of 6 to 12 months. But always advisable to buy on dips and corrections.
rahul asked, what is the future of IDBI and IFCI?
PRANAV SANGHAVI answers, IDBI could be heldwith a long term view. Whereas IFCI's outcome will depend on what valuation it receives from the potential bidders and also whatbusiness plan they have in mind for the company. Once that is known you could takea longer term view on the stock.
abc asked, Sir in next one year among TCS and Tata Power which will give better returns.
PRANAV SANGHAVI answers, I would like to think Tata Power as there is a huge shortfall in the powers demand supply ratio. Where as the Ruppee looking to remain stronger the Tech companies dependant on foreign income willremain hampered by the same.
abc asked, In cement pack which stocks are looking good.
PRANAV SANGHAVI answers, I still like Grasim, ACC and Guj Ambuja.
Umesh asked, should I buy Powergrid at this level that is 147
PRANAV SANGHAVI answers, You could with a longer term view.
Marc asked, What are the future prospects of Tech Mahindra, in view of IT stocks not doing well in the current scenario ?
PRANAV SANGHAVI answers, Yes even their margins will be hampered. But they have recieved an additional order from BT of around US$ 1 billion to be delivered over 5 years last year. So that US$ 200 million of addtional ioncome will help spurce its topline and bottomline.
Don asked, DLF, RCom, HDFC bank. Hold or sell?
PRANAV SANGHAVI answers, Definately a hold.
adithi asked, will market ever fall??
PRANAV SANGHAVI answers, I have been asking that question from 18,000 levels. Now the Index PE ratios have gone over 20 and I think it has to fall. The problem is everytime there is some fall the index bounces back equally fast.
ps asked, Dont you think evaluations for Praj and Crompton are High ? Can I still enter ?
PRANAV SANGHAVI answers, You could look at them with a longer term. But buy on dips.
Don asked, What do u think about buying Reliance Energy at this level?
PRANAV SANGHAVI answers, I think it has run up too much. It should correct along with the markets. But beyond that it could move up.
raj19 asked, sir are doing intraday trading if so pls suggest some tips
PRANAV SANGHAVI answers, I don't propagate intra-day trading as it is a very risky proposition even for the savviest traders.
lalitcs asked, should i sell powergrid at this level that is 147
PRANAV SANGHAVI answers, I would hold on.
indu asked, Will the Sensex hit 20,000 this year?
PRANAV SANGHAVI answers, It looks likely.
PRANAV SANGHAVI says, Well it is time for me to leave. Hope to see you'll next week. Bye for now.