Top 9 Stock Picks By Angel Broking

Angel Top Picks – March 2020

Markets turned volatile due to spread of Coronavirus globally – Markets corrected sharply on the day of the Union Budget as markets are expecting a bigger stimulus by the Government.

However post the initial disappointment markets recovered most of the losses as it realized that the budget did try and provide stimulus to the economy.

Sentiments were positive in the first half of the month despite a sharp rise in Novel Coronavirus cases in China as expectations were that it would be contained and will not become a global pandemic. However the positive sentiments turned negative globally in the last week of February as the Coronavirs spread beyond mainland China and there was a sharp jump in cases in South Korea, Iran and Italy.

As a result FPI flows slowed down sharply to Rs 1819 cr. in February 2020 as compared to Rs 12,123cr in January 2020.

Union Budget tried to balance Fiscal prudence with growth – The Union Budget 2020-21 was a prudent one wherein the Government tried to balance growth and fiscal prudence. The Government is clearly looking to stimulate the economy through increased spending and tax cuts. The new optional tax regime introduced by the Government will be beneficial for section of people who do not take benefit of deductions. As expected the Government let fiscal deficit slip by 50bps for FY20 and FY21 to support growth. Key highlight of the Budget was the Government’s focus on boosting domestic manufacturing as they increased import duties on a wide range of goods which will help domestic manufacturing companies.

Coronavirus to drive market sentiments in the short term –

With the Union Budget out of the way developments regarding Coronavirus will play a key role in determining market movements over the next couple of months. Earlier while the spread of the virus was largely contained in China the fallout was limited. However global markets have reacted negatively in recent days as it became evident that the virus has been spreading globally with countries like Iran, Italy and South Korea reporting rapid rise in fatalities due to the Coronavirus.

Demand had been adversely impacted during the first half of FY2020 due to multiple factors. However demand has improved significantly since the beginning of the festive season which is supported by improving auto and consumer durable sales along with improving PMI numbers. While India has so far not been impacted due to Coronavirus due to very few cases within India, any rapid spread of the virus in India can have an adverse impact o the markets

Top pick’s overview

We recommend our top picks as it has outperformed the benchmark BSE 100 since inception. We believe that quality midcaps along with consumer (both discretionary and non discretionary) space, private sector banks offers good growth opportunity going forward.