EW DELHI: All eyes are set on the coming general elections; and ahead of the watershed event the Indian markets are trading near their all-time highs, getting support from strong inflows from foreign institutional investors who are almost certain of a Narendra Modi-led NDA government after the general elections.
The basis of this 'certainty' is thanks to the opinion polls which are overwhelmingly predicting a BJP-led government at the Centre.
In this scenario, what should investors do ahead of the main event? Which stocks to buy and which sectors to choose from?
According to analysts, investors should focus on cyclical, banks and infrastructure, and probably shed weight on defensives such as IT and pharma.
"... it looks like that there is going to be a decisive government post May 16 and if that is your bet it makes sense to approach this market with an 'in the money' strategy," said Nilesh Shah, MD & CEO, Envision Capital.
"Investors may want to leave some ammunition for areas like technology, pharmaceuticals and dollar sensitives, where a correction has started," he said.
Shah is of the view that the sectors (IT & pharma) might get weaker before the guidance season; but barring that the rest of the pack, by and large, looks reasonably stable.

Unlike a mean-reversal rally where investors jump on to stocks that fell the most in the prior period, the recent rally has focused on sectors benefiting from a revival in large-scale infrastructure investment.

"With the sectors that had outperformed thus far, i.e. IT, healthcare and staples, remaining unchanged, the Indian market has been among the best performing in the past month," Credit Suisse said in a report.

Results of opinion polls have successively predicted a stronger victory for the BJP-led National Democratic Alliance, and predict 230+ seats for the alliance.

However, the global investment bank finds the opinion polls an unreliable indicator of the upcoming election result.

Here are experts’ equity calls for the day on how the market is expected to trade:

Ridham Desai, Morgan Stanley: Market is prepping for a macro trade as evident in low stock correlations and high relative volatility. The implied volatility levels are low and given relative valuations, the direction of this macro trade could be down. We are overweight on technology, telecom, consumer discretionary and energy. We remain underweight on banks, industrials, consumer staples and utilities.

Sanjeev Prasad, Kotak Institutional Equities: The reward-risk balance for the Indian stock market is less favourable after the sharp run-up in prices of several domestic cyclical and PSU stocks. Current stock prices already discount FY15 EPS for most large-cap stocks. Earnings upgrades will largely depend on favourable government action in a few sectors, which depend on favourable election outcome and continuation of reforms

NEW DELHI:
The S&P BSE Sensex snapped three-day winning streak and is trading lower in trade on Thursday, led by losses in ITCBSE -1.81 %, L&T, HDFCBSE -1.73 % and ICICI BankBSE -0.75 %.

Tracking the momentum, the 50-share Nifty index was trading near its key support levels of 6500, led by losses in FMCG, auto, oil & gas and auto stocks.

At 11:50 a.m.; the 30-share index was at 21,825.74, down 7.8 points or 0.04 per cent. It touched a high of 21,853.25 and a lo ..

Sun Pharma Ltd is a 'BUY' call with a target of Rs 610 and a stop loss of Rs 585

Aurobindo Pharma LtdBSE 1.02 % is a 'BUY' call with a target of Rs 545 and a stop loss of Rs 520

Bank of BarodaBSE -3.07 % is a 'SELL' call with a target of Rs 625 and a stop loss of Rs 655

BHELBSE -2.50 % is a 'SELL' call with a target of Rs 178 and a stop loss of Rs 191
Titan Company Ltd is a 'BUY' call with a target of Rs 275 and a stop loss of Rs 250

HULBSE 1.73 % is a 'BUY' call with a target of Rs 587 and a stop loss of Rs 560

Tata Communications LtdBSE 1.70 % is a 'BUY' call with a target of Rs 309 and a stop loss of Rs 285

Karnataka BankBSE 0.78 % is a 'BUY' call with a target of Rs 118 and a stop loss of Rs 108.75

HUL is a 'BUY' call with a target of Rs 590 and a stop loss of Rs 561

Lupin LtdBSE 0.85 % is a 'BUY' call with a target of Rs 980 and a stop loss of Rs 938

Tata Communications Ltd is a 'BUY' call with a target of Rs 305 and a stop loss of Rs 288

IDBI BankBSE -1.18 % Ltd is a 'BUY' call with a target of Rs 70 and a stop loss of Rs 56

Sesa Sterlite Ltd is a 'BUY' call with a target of Rs 190 and a stop loss of Rs 168

Tata Communications Ltd is a 'BUY' call with a target of Rs 340 and a stop loss of Rs 280

Torrent PowerBSE 0.43 % Ltd is a 'BUY' call with a target of Rs 95 and a stop loss of Rs 76

Hitachi Home Ltd is a 'BUY' call with a target of Rs 210 and a stop loss of Rs 165

Here is a list of ten stocks which are in focus in trade today:

Goldman Sachs has upgraded India to 'overweight' and has put an aggressive target of 7,600 for the Nifty in the next 12 months, which implies 17% upside from current levels.

Citing the reasons for the same, the global investment bank said in a report: "The cyclical macro adjustments in India have reduced external vulnerability. We now expect domestic fundamentals to improve as growth recovers in 2Q. Corporate earnings downgrades seem to have bottomed out, with more signs of improvement in the investment cycle. Headline valuations have recently expanded but cyclical sectors remain inexpensive compared to history and are relatively under-owned."

The Indian stock markets today extended gains and hit fresh all-time high as inflows continued on the back of positive cues from global markets. The benchmark Sensex was trading above 22,000.

Banks, auto oil & gas and realty sectors were the top sectoral performers in intraday trade.

Goldman said the upcoming parliamentary elections in April could have an impact on reforms progress.

Bulls paused for a breather after a strong run for over the last four weeks, which pushed up indices 7.5 percent in anticipation of improving macro-environment and a stable government after the elections.
The 30-share BSE Sensex shed 109.99 points or 0.5 percent during the week to close at 21809.80 after hitting record high of 22023.98.
The 50-share NSE Nifty touched life high of 6562.85 before closing the week 6504.20, 22.45 points or 0.3 percent compared previous week’s closing.
Consistent fall in inflation during first two months of 2014 and an expansion in industrial output in January for the first time in four months supported the market. But concerns over fresh tensions in Crimea and a slowing Chinese economy limited upsides.
It was a consolidation week for the market after record highs and that may continue for some more time, experts feel. But most of them think the pre-election rally is not over yet and advise buying on every dip ahead of general elections.
KR Bharat, MD, Advent Advisors said the upward momentum was unlikely to fizzle out anytime soon, and the market could ignore economic realities in India and overseas and also the geopolitical realities, for a while.
According to him, the market has also discounted a stable government and is now in the process of discounting some of the likely policy initiatives as well.
In economic data, February CPI inflation slipped to 25-month low at 8.1 percent (from 8.79 percent in January), which is close to RBI’s comfort level of 8 percent. It has raised hopes that the RBI may not hike policy rates at its next meeting on April 1.
WPI inflation softened to a nine-month low at 4.68 percent in February as against 5.05 percent in previous month supported by fall in vegetable prices.
January industrial output grew 0.1 percent compared to contraction of 0.2 percent in earlier month but consumer goods, capital goods and manufacturing remained in the negative domain.
BSE Healthcare, Metal and IT indices were hit hard, falling 1.7 percent, 4.82 percent and 6 percent, respectively.
However, the Capital Goods index gained the most, rising 3.5 percent followed by Bank, Realty, Oil & Gas and FMCG with 1-2 percent.
Infosys was the biggest loser, shedding 9 percent after chairman Narayana Murthy sounded caution on the company’s growth . The management in Barclays investor conference said that revenue growth for FY14 was likely to be at the lower end of its guidance (11.5-12 percent). Brokerage house Deutsche Bank cut target price on the stock to Rs 3,600 from Rs 3,800. This had a ripple effect on other IT majors like TCS and HCL Technologies, which fell 4-5 percent.
Metal shares weakened on poor Chinese trade data. Copper prices hit the lowest since July 2010 while iron ore prices touched more than 1.5-year lows during the week, which caused Sesa Sterlite, Hindalco Industries and Tata Steel to lose around 8 percent.
Ranbaxy Labs fell over 7 percent as Supreme Court on Friday issued notice to company on following a PIL that the company was selling adulterated cholesterol lowering drugs in the country. The company, which is already facing manufacturing quality concerns, has recalled more than 64,000 bottles of cholesterol lowering drug in the US.
Sun Pharma was the latest company in import alert list. It received import alert on its Karkhadi unit in Gujarat. The stock fell 5 percent though the company said the contribution of this unit to company’s revenue is negligible. In another blow, the drug maker recalled one batch of subsidiary’s Glumetza generic, according to sources.
Commercial vehicle maker Tata Motors slipped 4 percent on consistent worries over its domestic automotive business but Jaguar Land Rover continued to help its global business, with sales growing 14 percent in February.
 Axis Bank declined over 3.5 percent. Divestment secretary on Friday said the government would raise Rs 3,000-4,000 crore via SUUTI stake sale in Axis Bank by March-end, reports CNBC-TV18 quoting Reuters. However, engineering and construction major Larsen & Toubro climbed nearly 5 percent as the company received an order worth Rs 3,655 crore for mega-road project in Qatar. Oil marketing company BPCL rallied over 6 percent on source-based reports that the government will reimburse under-recoveries next week. Tata Power gained 5 percent after the Appellate Tribunal of Electricity (ATE) asked the Delhi Electricity Regulatory Commission (DERC) and private power distribution companies in the city to lay out a roadmap for liquidation of “regulatory assets” worth up to Rs 8,000 crore. Among others, IDFC, Kotak Mahindra Bank, Hero Motocorp, IndusInd Bank and Mahindra & Mahindra were up 4-8 percent. The rally in banks was also after brokerage house Morgan Stanley upgraded financials to attractive from in-line with the raising ICICI Bank's target price to Rs 1,500 apiece from Rs 1,225 and HDFC Bank's target to Rs 1,000 from Rs 875. In the corporate developments, sources said the government raised Rs 5,340 crore through stake sale in IOC today. ONGC and Oil India bought 5 percent stake each in IOC. L&T Finance Holdings’ offer for sale issue fully subscribed, but was priced at a steep discount to market price. The company was also included in NSE F&O segment from Thursday. Top car maker Maruti Suzuki has sent a clarification to market regulator Securities and Exchange Board of India (SEBI) over the recent decision to have its parent Suzuki Motor Corporation set up a manufacturing plant in Gujarat, reports CNBC-TV18 quoting sources. Among midcaps, HCL Infosystems, Coromandel Engineering, Adhunik Metaliks, Dalmia Bharat, Gati, Ceat, Engineers India, BEML and JK Tyre surged 12-36 percent. For the week ahead, investors will closely watch Sunday’s referendum in Crimea and FOMC meeting on March 18-19.

Bharti Airtel Ltd: 

Bharti AirtelBSE -1.66 % is raising over $400 million (Rs 2,446 crore) through a bond offering to European investors, its second in less than a quarter, a banker on the deal said, as the telecom major moved to bring down its net finance costs. 

Maruti SuzukiBSE -0.14 % Ltd: 

 Maruti's institutional investors today approached Sebi, seeking its intervention to safeguard minority shareholders' interests and to ensure compliance with good corporate governance norms with regard to the transfer of a Gujarat project to the car maker's Japanese parent Suzuki. 

Gujarat Gas Company Limited: 

Post a Petroleum and Natural Gas Regulatory Board (PNGRB) nod, Gujarat Gas CompanyBSE 1.22 % Limited (GGCL) can now expand its city gas distribution (CGD) network into Bhavnagar district. 

Tata Motors Ltd: 

Tata MotorsBSE 0.19 % said global sales, including Jaguar Land Rover (JLR) vehicles, declined 19.06 per cent to 79,996 units in February from a year ago. The company had sold 98,837 units in February last year, Tata Motors said in a statement.

AstraZeneca Pharma India Ltd: 

The board will meet on 15 March to decide on delisting the company's shares from the stock exchanges. The drug maker's Swedish parent, AstraZenecaBSE 8.46 % Pharmaceuticals AB, had on 1 March written to the Indian unit about its decision to voluntarily delist the company, said media reports.

MphasisS Ltd:  

HP-owned IT services firm MphasiSBSE -1.69 % reported a 2 per cent fall in consolidated net profit at Rs 180.6 crore for the first quarter ended January 31, 2014.

Crompton Greaves Ltd:

Billionaire Gautam Thapar has put Crompton GreavesBSE 0.88 % up for sale, said two persons familiar with the development. Thapar wants to sell his controlling 42.7% stake to an overseas company seeking to establish itself in the Indian power transmission and distribution sector, said one of the persons.

Infosys Ltd: 

IT services major InfosysBSE 0.55 % said its Senior Vice President and head of Computers and Communications Divisio(CCD) K Muralikrishna has sold shares worth Rs 5.48 crore

IOC Ltd:

State-owned Indian OilBSE -0.35 % Corp ( IOCBSE -0.35 %) is mulling setting up a Rs 30,000 crore refinery at Mundra in Gujarat as part of a plan to increase its processing capacity to 100 million tonnes.

Coal India Ltd:

Production and supplies at Coal IndiaBSE -0.13 % mines dwindled about 20% on Thursday as officers of the state-run company started a three-day strike demanding salary increase. Coal-fired power generation, though, has not been ffected and is expected to remain largely normal the next two days as most power stations have stocked up enough coal.