Expect market to remain in 5650-5950 range in near term: Deven Choksey

In an interview with ET Now, Deven Choksey, MD, KR Choksey Securities, shares his views on the FOMC meet and the market. Excerpts:

ET Now: What is likely to be your approach given the big global event that is lined up today?

Deven Choksey: The FOMC event is basically much hyped and speculated about. Well, I believe that it is not very likely that they would withdraw the QE3 in a hurry. At the same time let us not forget that Ben Bernanke’s terms are getting over in September. So probably he may want to leave it to his successor to take the course for withdrawal of QE3. I would rather say that it would be a gradual process. It might probably be a break before they actually announce the withdrawal and that could possibly be the course that they may head up.

Now given that possibility, the impact which I see as far as our markets, our emerging markets are concerned, I believe that they may not be in a hurry to withdraw money in quick succession from the markets and that is the likely scenario. At the same time we are also seeing the kind of possibilities of government working hard on bringing in a lot of new measures, higher amount of FDI in different sectors. So that could possibly have a positive impact on to the rupee. My own take is that the rupee would probably move in the direction of 56, 57, or 55-57 after staying depreciated around 58-59 or 60 levels. So from that perspective I believe that it is not something which I would be very worried about. The entire market may see some knee jerk reactions here and there and we will stabilise eventually.

ET Now: What is your view on the market then from a three-month perspective?

Deven Choksey: Yes, having seen the movement upwards from 5450 and all the way to 6200 plus levels, it is natural to expect some amount of correction in the market and which I believe the market has done. I am not too sure whether it wants to fall further, but till the time it holds somewhere around 5750 odd levels, I don’t think that the market would go down in a hurry. I would rather think that the market would trade in 5650-5950 kind of levels and to break above that range it would certainly require higher amount of boosters. But I believe that we are going to trade in this range and may be the RBI policy in July could possibly clear the way for the market to go up. But till that point of time I believe that we are going to remain in the range of 5650-5950.

ET Now: What would be your top three stock ideas at this point in time?

Deven Choksey: Clearly some of the banking stocks appeal to me more. They are remaining at discounted levels. They are staying in the range of 1 to 1.5 times price to book value and I am referring to some of the large size banks like SBI in the PSU space and believe probably the worst is behind the banking space as a whole. Going forward with the fall in the interest rate, which is more likely, I think that the banks would probably be the preferred choice for many investors.