Buy Realty Stocks On Monday, Says Vishwas Agarwal

Buy Realty Stocks On Monday, Says Vishwas AgarwalThe 30 share index, Sensex gained 409.84 points in the week ended Dec 19, 2008, while the broad based NSE Nifty surged 156.15 points during the same period.

On Monday, the benchmark index Sensex started the week strongly following worldwide signals and saw volatility all through the day. Realty and metal sectors were the major performers.

Home loan seekers turned happy as Public sector banks declared fiscal package for the realty segment with focus on smaller value homes. It announced that the home loan rates for upto Rs 5 lakh should not be more than 8.5%. Interest on loans between Rs 5-20 lakh will be 9.25%. There will be no process and prepayment fees for home loans upto Rs 5 lakh. New home loans package will be valid till Jun. 30, 2009.

The same reaction was also witnessed on the next day (Tuesday). The Sensex touched 10,000 mark, first time since Novermber 10 on the back of heavy buying action, whereas the Nifty, after choppy trade ended the day above the 3,000-mark. The Mid-cap and the Small-cap indices outperformed the Sensex with gains of 2.50% and 3.21% respectively.

On Wednesday, Satyam Computer Services pulled Indian shares lower, after the company smashed investor confidence. Satyam computers lost 30.2% at 158.05 after reversing the plans to takeover Maytas properties and get hold of 51% stakes in Maytas Infra.

The Sensex went against 10,000-mark during early trade tracking the US Federal Reserve’s decision to slash its target interest rate. It cut its target for the interbank federal funds rate to a range of zero to 0.25%, a record low from 1% earlier.

On Thursday, Indian equities closed on a cheerful note crossing the 10,000 mark as inflationary figures went down sharply. Continued buying action was seen across realty, banking, power, consumer goods and IT stocks.

The Sensex opened on a bearish note on Friday. Finally, it closed the week on a flat note amid volatility as investors booked profit at higher levels. Realty stocks gained the most on hopes of further interest rate cuts with inflation rate easing.  Auto and consumer durable stocks also gained while oil & gas stocks dropped.

During the week, mid-cap stocks zoomed 213.51 points to 3,263.99, while small-cap shares surged 213.06 points to 3,744.02.

Major gainers during the week in the sectoral indices included Realty gained 18.66%, BSE Conusmer Durables 14.67%, PSU rose 14.32%, Auto climbed 7.75%, and Power went up 5.99%.

While commenting on the market, Stock market analyst, Vishwas Agarwal, said, “Some profit is advisable on Monday as F&O closing is near.”

Mr. Vishwas expects some volatility in the stock market, which may harm some impetus but overall market is expected to be in the strong zone.

Agarwal opined, “Maximum mid-cap and frontline stocks is expected to go up further. One must use buy in dips strategy and sell on sharp rise strategy to book profits.”

It is better to buy realty stocks on Monday, he advised.

Analyst Views: