Invest in bank stocks

Rajesh Jain of Pranav Securities is of the view that banking space becomes focus for investment.

Jain told CNBC-TV18, "The banking group gave a tremendous opportunity because it was the CRR trigger, which took the markets down and creating tremendous opportunity for buying afresh into the banking space whether it is the leaders or the second rung private and public sector banks or even the smallcaps within this space. So I think it is come back with a vengeance as far as investing in the banking portfolio is concerned."

He further added, "If one looks at the fundamentals there the NIM ought to expand because the lending rates tend to go up faster than the deposit rates, when the interest rate scenario looks upward. So the NIM should look great for the quarter that is just getting over and going forward also the margins for the banking sector would look very upbeat. One couple that with sustained credit growth; corporate credit and retail credit growth has been good and now with the news of agricultural growth coming back on track, it would not be surprising to see even the priority sector lending portfolios looking good. And then one also has the restructuring possibilities just ahead of the budget, expect some smart give aways or restructuring announcements in the budget, so the baking space becomes focus for investment."

"In IT one had some question marks on the rupee appreciation vis-à-vis a dollar, which is perhaps held back by purported slow down in the US economy but aside of that if one look at everything else the recruitment numbers, the volume, the traction in terms of new orders, the restructuring, the acquisitions and whether it is the largecap big four or whether it is tier II, tier III companies, there is tremendous expectation from the numbers and I presume some sort of build up ahead of the first IT numbers from BFL or Infosys in the first 10 days of next month is already started. And like I said, the fall in December has created very good buying-in-zones for various levels of investors and traders."