'OB, Dena Bank and Canara Bank looking strong'

In a chat with ET Now, Prakash Diwan, Head — Institutional Business, Networth Stock Broking, talks about the outlook of OMC and banking stocks.

Do you think that there is still a trading play left in oil marketing companies and one can even look at buying at these levels?

No. I would not recommend any fresh longs in the OMCs at these levels. The relentless surge in HPCL and BPCL has been surprising. To some extent, you can book profits whenever you get these large gains in these stocks but not look at fresh positions to be built.

Do you think this momentum that we are seeing build up in not just the frontliner banks, even your smaller boys as well is sustainable?

Banking has again surprised market players because we never expected banking to continue even when interest rates were firming up. However, the onslaught of monsoons is giving some sort of indication that credit will pick up at some stage earlier than what people expected and that's exactly why the second rung banks, which had not participated so much in the rally when the larger ones like SBI, HDFC and ICICI did, probably you could now add to the bandwagon. IOB, Dena Bank and Canara Bank are looking coming up with very strong performance. It is a positive performance expectation driven momentum that you see now.