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    Be patient! Reliance going through time-wise correction

    Synopsis

    Reliance is a sector by itself, it almost has sectoral weightage or sectoral footprint on the markets, says Atul Suri

    Atul Suri-Marathon-NEW-1200ETMarkets.com
    We are seeing backup teams or the underperformers of many years catching up now, says Atul Suri, CEO, Marathon Trends – PMS.

    What is happening with Reliance? From Rs 2,360 odd levels, it has fallen sub Rs 1,900. A lot of questions are being raised on a fundamental basis. Could it go into time wise consolidation?
    That is exactly what is happening. You cannot write off the company by virtue of the new economy businesses that it has got into and the success it has made out of it. Globally, there could be a case study of a company of this size moving away from the old economy to new economy businesses and that also pretty successfully.

    Reliance is going to be an integral part of India in economy, especially in view of the successful move into the new age businesses. So there might be time wise correction, what you rightly put it out but this is a stock you cannot ignore because when it moves, as I always say that Reliance is a sector by itself, it almost has sectoral weightage or sectoral footprint on the markets and the time will come. We just need to be a little patient but it definitely has done dramatic work in the last few years and that is why you will find a reflection of that in the stock in the years to come.

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    Something unique is happening in autos, what started with a big move on the rural focussed plays like M&M and Escorts is now rubbing off on the Maruti, Tata Motors, Eicher and ancillaries like Bosch, Balkrishna Industries. What is happening here?
    Auto is yet again another sector that has taken people by surprise. Initially, I thought that this was just a dead cat bounce but they have continued to strengthen. Some spaces are intrinsic to the underlying economy. There is auto, metals, cement. Even cement stocks are doing very well. So we are seeing a broadening of plays and the market is positioning for an economic revival.

    These are those sectors which have been underperformers for almost a decade and now they have a catch up to do. You are seeing markets at lifetime highs. These stocks are still 20-30-40% away from lifetime highs. We are seeing a very big catch-up trade and it is very important because you cannot have two or three sectors taking the market higher; you need the backup, the B team. We are now seeing the backup teams or the underperformers of many years catching up now.

    The question is that as an investor you really cannot be in one sector one month and in another sector another month. That is okay for a trader, it is ultimately going to be your call that in the larger term what is that sector or theme which is going to outperform and be the biggest value creator on a multiyear basis as it plays out.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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