Market Guru in talk with RJ Salil Acharya of Radio City: Deep Correction expected in Banking and NBFC stocks in August

Anil Singhvi, Managing Editor, Zee Business, says that the first week of August 2020 is going to be challenging for the stock market and hints were seen in the last week of July 2020. During a candid radio chat with RJ Salil, Radio City, 91.1 FM, Mumbai, Mr Singhvi said, “The first week or the first fifteen days of August is going to be challenging for the market as good actions were seen for consecutive four months or so and possibly a good correction will be seen, soon.” He added, “Symptoms of the correction were seen in the last week of July where the markets either stopped or were stuck within a certain level.”  

RJ Salil in his question said, everything is happening good in the stocks markets and they are touching new heights, maybe 4-5 big stocks are contributing the most in this movement but the sentiments are positive, to which Mr Singhvi replied by sighting example of climbing on the Mount Everest, which is a challenging endeavour. He said, it is said that the speed of the gushing winds increases when you move towards the peak and it is harder to stay there. In such a case, the person will just host the flag at the top and comes down, instead of spending a few days there. So the level, the markets have reached is a bit risky and there will be some correction, after which the markets will start moving up again. He added I think, the first week of August, in fact, the first fortnight of the month is challenging. This means you should be on an alert and save money, which can be invested at lower levels when a good correction is made.

Citing an example of few stocks like Reliance, HDFC and Infosys, which performed well in the last three to four months and have posted good results for Q1FY20, RJ Salil asked Mr Singhvi to name few such stocks on which his listeners can concentrate in the first week of August, to which he replied, “More or less the result season will end, i.e. maximum big results will be announced, by July 31, 2020, and then the trades that will be made next week will completely depend on the global markets.” 

He added, one thing is very clear that there is a need to be careful on the stocks that have run in this period and they are banks and NBFCs. I believe that a good correction will be seen in banks in the next 10-15 days, which means you have to think about buying the stocks of ICICI Bank and Kotak Mahindra Bank at lower levels. But let there be a good correction that is likely to happen in 10-15 days and invest in those stocks when you see a good opportunity in them. However, the warriors of stock markets, i.e. those with risk appetite, will get opportunities in NBFC shares. 

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On being asked about the stocks where these investors with risk appetite can invest, Mr Singhvi said, they can invest in stocks like Bajaj Finance and Bajaj Finserv, which will provide good opportunities to enter after the correction. He said the investors can focus on four stocks, namely ICICI Bank, Kotak Mahindra Bank, Bajaj Finance and Bajaj Finserv. 

Market Guru in talks with RJ Salil Acharya of Radio City is a 12 part series of interviews on stocks market.