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Exit cement; bet on Sesa Goa, RComm & Arvind: Tulsian
18 Jun 2012, 05:22 PM  Watch Video
In his analysis of the day's stocks on CNBC-TV18, SP Tulsian of sptulsian.com, explains that though the penalties in the expected CCI order regarding cartelisation in the cement sector might be light, it may have an adverse impact on the entire sector especially in the case of Ambuja Cement, Ultratech, and ACC.

Tulsian is optimistic on Sesa Goa due to its merger with Sterlite; on RComm, due to the expected mobilisation of close to USD 1 billion and on Arvind, due to renewed trading interest.

Below is an edited transcript of the analysis on CNBC-TV18. Also watch the accompanying video

Q: What do you make of the fall in rate-sensitive sectors like real estate and public sector banks after the policy?

A: There is massive liquidation which is more of a trading nature. The technicals are now making these two sectors the most vulnerable because of huge built-up positions on expectations that the RBI would cut rates was very high.

The RBI's decision to leave rates unchanged has forced the market to adopt a negative stance which is causing massive liquidation.

In the last one week, there was some correction in the Bank Nifty on Thursday which built up on Friday and was swiftly raised by 200-250 points on Friday.

But real estate stocks have been seeing a lot of long positions being built-up - HDIL, DLF, Indiabulls Real Estate. I am not talking of the cash-segment stocks like Parshwanath which also have been seeing huge positions being built up. So probably all the weak hands are now exiting from all these stocks and causing a steep correction.

Q: How do you approach Tata Steel and Tinplate, the only stock to have done well in todays falling market?

A: Tata Steel is increasing its stake in Tata Sponge to 51% by making an open offer of about 11% and a similar initiative is being implemented by Tinplate which is increasing its stake to 74% by making an open offer of 14%.

But I don't think that this kind of upside is really sustainable. If you see
 
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