Sensex recovers over 7,000 points from its June low; Amisha Vora suggests buying these 5 stocks now

Benchmark equity index BSE Sensex has witnessed a sharp recovery of over 7,000 points from June lows so far. The 30-share index advanced 14.17 per cent to 58,136.36 on August 2, 2022 from an intraday low of 50,921.22, scaled on June 17. In an interaction with Business Today, market veteran Amisha Vora, Joint MD, Prabhudas Lilladher said the equity market may remain volatile in the near to medium term with the rate hike cycle by the US Fed likely to take out liquidity and increase the cost of capital.

She believes that till inflation doesn’t cool off-led by both demand cool off and supply normalisation, the Fed hike cycle will continue. “The larger worry is demand destruction could push the economies in slow mode, possibly even recession which is never good for equities,” Vora said.

However, the market watcher believes that the Nifty may touch 19,066 in the base case scenario by March 2023, showing an upside of 10 per cent from the current levels of 17,268. Vora sees Nifty at 21,525 and 15,052 in the bull case and bear case, respectively.

While sharing her views on the emerging buying opportunities in this market, Vora said, “We are positive on the automobile, banking, telecom, information technology, capital goods and hospitals.” For stock-specific investors, she further advised investors to zero in Tata Motors, HDFC Bank, Crompton Consumer, Larsen & Toubro and Infosys.”

Tata Motors is likely to gain further market share led by revamped portfolio, customer preference for SUVs and rising EV penetration. The stock will be a big beneficiary of the normalisation of chip supply shortage and lockdowns in China. On the other hand, the merger of two systemically important financial institutions would boost the balance sheet size of HDFC Bank and will give access to a larger client base and cross-sell opportunities. The merged entity will continue to garner deposits, meet regulatory requirements and improve profitability,” she said.

Going ahead, she believes that any less hawkish commentary from the US Fed Reserve with respect to the rate hike cycle and decline in inflation will be the main triggers for sentiments to improve. “Post correction over the past six months, markets have become attractively priced and could lead to a phase of higher net FII inflows,” Vora said. With a net inflow of over Rs 4,800 crore in equities, foreign institutional investors turned net buyers in the domestic equity market after selling shares worth over Rs 2.55 lakh crore between October 2021 and June 2022.

“Lastly, she advised new investors that time in markets matters more than timing the market,” she said.

Also read: Nifty unlikely to deliver any return in CY22: Sanjay Mookim of JP Morgan

Also read: Further 5-7% fall in stocks is possible, warns market veteran Samir Arora 

Also read: Should you be greedy or fearful on Dalal Street now? Richa Agarwal of Equitymaster explains