Jul 30, 2010

Large caps a safe bet

ET Now: Given the near term weakness that we are seeing on the indices, what is that you are buying this morning, if at all?

Gajendra Nagpal: The kind of weakness that we saw over the weekend in the US markets led us to believe that there could be a pause in the rally, but the way SGX Nifty has been behaving, it seems that though the market opening could be on the lower side, significant fall is ruled out.

I do believe that in such circumstances, when the market is throwing up an uncertainty in the near terms, the safe haven could be the large cap stocks. I think when there are macro level challenges, when one is not sure as to how it is going to pan out, because there has been a talk of double dip depreciation happening again in the US, I think the safe haven could be the large cap stocks which have been doing well.

So in that sense I would want to bank upon stocks like L&T, State Bank of India and BHEL. I think these are stocks which have shown a credible performance over last few months and a few trading sessions and I think that they would continue to give you some kind of solace from the uncertain markets.