Rupee fall largely done; see scope for pullback: Kotak AMC

Alroy Lobo of Kotak AMC believes global events are likely to determine the market direction ahead, with issues in the Eurozone remaining the key overhang.

The BSE Sensex opened lower on Thursday, tracking the sharp selling across Asian bourses. The Nifty index came close to falling below the 5,100 mark, and the rupee was sharply lower against the dollar.

Overnight, the Fed said it was extending Operation Twist to keep long-term interest rates low. But markets were disappointed by the move.

According to Lobo, Nifty may test support levels post the first quarter results, which he feels may be disappointing. On the positive side, he says, the rupee depreciation is largely done and he sees scope for a pullback.

Commenting sector-specific, Lobo says, the current correction in cement stocks is a good opportunity to increase exposure in the sector.

Cement companies are under selling pressure over concerns of a penalty for alleged cartelization. “I think many investors are looking for an opportunity to buy cement,” he told CNBC-TV18 in an interview. 

He remains underweight on Reliance Industries, citing limited upside for the stock.

“We also remain cautious on the banking sector,” he says adding, the NPA cycle is still to bottom out.

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