Positive on banks, IT; book profits in momentum stocks: Edelweiss Securities

Aditya Narain, Head of Research-Institutional Equities, Edelweiss Securities, said, “When you have got so much momentum in the market which is out of the ordinary and is not aligned with a lot of global markets plus you have individual stocks just going through the roof, then it does make sense to take some money off the table.”

On momentum stocks like IRCTC, Tata Power that have created great wealth for investors, Narain said, “In a lot of these individual stocks and a couple of others, the kind of returns you have made have been over the top. So, it is only fair to take some money off the table on some of these. When you reach the market, which starts seeing what you could call irrational responses from stocks on the outside, it's time to be a little careful. And it is reflective of the entire market too.”

On the collapse seen in the midcap segment, Narain said, “Typically when markets move up so much, they also tend to get a little edgier. I think a bit of it has been triggered in the backdrop of very strong markets by the fact that a couple of large companies have kind of disappointed vis-a-vis expectations. Now those disappointments haven't been large, they aren't against the run of play, which is businesses generally looking better. But the fact that you had markets which have moved so much stocks, there is a little bit of skittishness in the market, and that starts playing through into stock prices when you do see some of these disappointments.”