PFC, REC Likely to Hit Record Highs: Manghnani

Anil Manghnani of Modern Shares & Stock Brokers says the premium in index future suggests less interest in the broader Nifty. As a result, the Nifty will likely remain range bound in the days to come, but individual stocks are likely to see action. (Watch interview here)

PSU banking stocks, which have broken out of a three to four-year downward trend, will continue to rally, he said.

"The breakout that has happened after six years is supposed to last more than three months" he added. Compared to other sectoral indices, PSU banks are still away from their all-time highs, Mr Manghnani said.

Many PSU stocks are retracing from their recent highs without the index moving anywhere, so it should be used as an opportunity to make fresh entry into these stocks, he said. But Mr Manghnani cautioned that entry in these stocks at current levels have to have a time horizon of at least a year.

"The volume expansion in most of the PSU names suggests that there is something bigger happening," said Mr Manghnani. The BJP government's focus on reviving PSUs will help the rally in these stocks, he added.

Here are Manghnani's stock recommendations:

Oriental Bank of Commerce, Canara Bank, Indian Overseas Bank, Andhra bank and UCO Bank are among his top picks in the PSU banking space. Power Finance Company and Rural Electrification Corporation will take out their life highs as these stocks have moved with huge volumes. Mr Manghnani said.