Stocks on Dalal Street are likely to correct for the second day in a row following negative global cues and some profit booking. Expect the benchmark index or the Sensex to correct by nearly 2 percent or more than 300 points to test the 15,250 level
Midcaps might be under tremendous pressure after a humongous run for the past one month. Investors might shun the companies with corporate governance issues following the news of fraudulent transactions by Austral Coke.Market watchdog Securities and Exchange Board of India today barred metallurgical coke producer Austral Coke from raising any fresh equity after the income tax department unearthed an alleged more than Rs 1,000 crore fraud in the company's transactions.
We have been advising investors to stay on sidelines and today might be the beginning of a a short term correction which might take the index to 14,800 level. We do not see a big percentage loss on the Sensex in the near term, but Midcaps might correct anywhere between 20 to 40 percent following the speculative run they have witnessed.
Book profits in all the midcaps as we believe that largecaps are bound to make a comeback in case of a pull back, as we think it is all over for the second and third rung counters. We advice booking profits in Realty and second Rung IT stocks as the party seems to be over. Overall, a bad day for the Sensex as Bears will look to take advantage of the opportunity