7 October, 2008

The Indian stock markets are crumbling in the face of global economic melt down. For the stock market investors who still have the courage to invest in stocks this could be the greatest opportunity to pick stocks which have fallen way below their true value.

This is what experts have to say about where the Indian stock market  is headed and which stocks to buy in this stock market crash.

1. E Mathew, Director, Mathew Easow Fiscal Services, says that  the  move below 3,800 has certainly created tremendous amount of panic. “A lot of fundamental analysts are now following technicals. As one level breaks after the other, a sense of panic is creeping in, which in the long run may be good for the market and could lead to capitulation.”

He sees major support for the Nifty below 3,800 at 3,570-3,600. “It has to be said that important levels one after the other are getting violated. Nevertheless, I do feel the capitulation levels could take us somewhere close 3,570-3,600. In a way if a total sell-off takes place, it could be good for markets, so that the poison is totally cleaned out from the system.”

Mathew believes markets may reach the capitulation stage this week itself, because, Infosys’ results are not going to be too encouraging and there is no silver lining as of now in Europe. “These are typical signs of capitulation levels and hopefully the last bull would have also bailed out. After this, some sort of base building could commence around 3,570-3,600 zone.”

2. Vikas Sethi, Managing Director, Sethi Finmart said that there is panic everywhere; people are not trying to look at the stock markets from an investment point of view. “They are just looking at the market on a daily basis and whoever would have put in money in the last three-four days would have suddenly lost it in huge percentage terms. My advice to investors would be that this is a very good time to get into the market and start investing in the market and if people do invest in the market at the current level, I feel they would be committing the same mistake, which they have done by not selling the stocks at 21,000 levels.”

He is bullish on certain stocks from the midcap space. "Everest Kanto Cylinder at current levels of around Rs 240 looks good. This company is India's largest manufacturer of Compressed Natural Gas cylinders. CNG vehicles have shown a compound annual growth rate, or CAGR of 30% in India and 50% in Asia during the last five years. This growth is likely to continue in coming years because of governmental support and operational economics of CNG vehicles."
 

3. Ambareesh Baliga of Karvy Stock Broking does not expect any sort of bounceback from the current levels in the near future and believes that the liquidity crunch is driving the markets down. He expects this scenario to continue for some more time. “It does not matter whether it is 3,650 on the Nifty or 12,000 levels on the Sensex today because most people have given up."

 “Clearly stop losses are being triggered. There are margin calls happening but unlike in the past where people used to come and start buying whenever the markets used to fall hoping for a bounce back; the market scenario is such that even people who used to come and start buying in a bounce back have disappeared,” Baliga added.

Baliga does not expect anybody to come forward and start buying as the market is close to panic and many people have given up on the markets. He does not believe that payment issues would be a problem in the Indian market. “I d