MARKET REVIEW FOR UPCOMING SESSIONS

Until the general election, the Indian market will be volatile and the trend will be largely dictated by global cues. Investors will be better off to book losses in small-caps and invest in quality large-cap as well as mid-cap stocks.This is a good time to invest in the market as many quality names are off their all-time highs and are available at reasonable valuations. So, quality investing and diversification are the two main ideas for equity investing at this juncture.We are advising investors to sell small-cap stocks which are not backed by quality or have corporate governance issues and to recover the lost value we are advising them to invest in quality large-caps and mid-caps.Market volatility has increased along with the market risk premium. In fact, non-frontline stocks are faced with additional challenges of liquidity. Thus, they could correct also significantly during periods of stress

.Hence, investors should be more focused on frontline stocks which can tide the market volatility better. We expect Nifty 50 index to remain range-bound in rest of February 2019 with a target of 10,900 on the upside. The immediate support for the index falls around 10,550-10,580.In this regard, we advise investors to invest in quality names like HDFC Bank, Infosys, Titan and Ultratech Cement where downside appears to be limited.

An analysis of December 2018 ended quarterly earnings reveals that banks having sizeable corporate exposure witnessed a healthy recovery in earnings mainly led by improvement in their asset qualities and recovery in bad loans.

We believe this trend is likely to continue in subsequent quarters, and therefore like corporate banks like ICICI Bank and Axis Bank in a volatile market environment.