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)
Trending On Reuters
What seemed like a possibility for the Nifty to cross the 8,000 mark just two weeks ago has now turned out to be a far-fetched dream. A 7,950-8,000 range could be used to book partial profits and re-enter closer to 7,750-7,800 for the next couple of weeks. The next big trigger would be the arrival of monsoons, writes Ambareesh Baliga. Read