Stocks in India are expected to fly high on opening bell as money on the sidelines is likely to flow in to the market on hopes that the Singh led UPA government is likely to bolster the slowing economy with financial reforms. Expect the Sensex to gain more than 400 points or 4 percent for the day.
We might see heavy buying in the PSU stocks on speculation that the newly formed Singh government is likely to implement the disinvestment program in the next few months. There might be 40 to 50 percent move in these stocks and we have given our picks in these sectors to our subscribers.
Telecom and Insurance sectors are going to be the major beneficiaries if the government move ahead with measures to increase FDI Cap from 26 to 49 percent. Banking and Infra structure stocks are likely to be among the gainers in today's trade.Analysts in the market expect the Sensex to touch 14,000 level, barring any major global melt down.
We advise investors not to buy in the first hour of the market as we are likely to see a huge gap up pending of more than 700 points. One could look at buying stocks in the afternoon session, as things are likely to cool off after initial euphoria. It is a good idea trim your holdings in speculative counters and build positions in PSU and related entities going forward.Overall a great day for the stocks, but we expect some cool off after an explosive opening in the morning