BofA-Merrill says Sensex to remain range-bound

Mon Jul 15, 2013 5:11pm IST

Brokers trade on their computer terminals at a stock brokerage firm in Mumbai July 23, 2008. REUTERS/Punit Paranjpe/Files

Brokers trade on their computer terminals at a stock brokerage firm in Mumbai July 23, 2008.

Credit: Reuters/Punit Paranjpe/Files

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Reuters Market Eye - Bank of America-Merrill Lynch expects the BSE Sensex to remain range-bound with limited upside of 5 percent until regional elections in mid-November and given the prospect of "sluggish" GDP and earnings growth.

Still, the bank recommends investors be ready to buy on dips at BSE levels of 19,000-19,300 points.

The bank highlights rupee stabilisation at around 60 to the dollar, a normal monsoon, and potential of rate cuts later in the year are supportive of shares.

BofA-Merrill's model portfolio continues to be driven by sectors that would benefit from rupee weakness such as drug makers and interest rate sensitive stocks such as autos and banks. It also remains overweight on telecom shares.

BofA-Merrill's top buys currently are: Lupin (LUPN.NS), Hero MotoCorp (HROM.NS), ICICI Bank (ICBK.NS), HDFC Bank (HDBK.NS) and Idea Cellular (IDEA.NS).

Its top sells are: Bajaj Auto (BAJA.NS), Ranbaxy Laboratories (RANB.NS), Hindustan Unilever (HLL.NS), NTPC (NTPC.NS) and Adani Power (ADAN.NS).

(Reporting by Abhishek Vishnoi)

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