Credit Suisse says Indian stocks are unlikely to face a crisis and recommends selective bargain-hunting, despite what it notes is "extreme defensiveness" in market consensus. "Market consensus has now veered towards extreme defensiveness, and phrases like 'currency crisis' and 'meltdown' are being bandied about," Credit Suisse writes in a note dated on Tuesday.
"But we also believe a crisis is unlikely: bargain-hunting selectively makes sense."
Indian shares fell for a fifth consecutive session on Tuesday on concerns that foreign investors are paring their holdings ahead of what are expected to be lacklustre earnings reports this month.
Credit Suisse says the broader market "doesn't look attractive yet" given its expectations for around a 10 percent downside in fiscal 2014 earnings and the continued chances of meaningful corrections in large sectors such as financials.
However, the investment bank recommends selective buying in stocks and highlights its preference for NTPC Ltd, Cairn India Ltd, Ambuja Cements Ltd, Reliance Industries Ltd, and Sterlite Industries (India) Ltd.
Credit Suisse also says its prefers Tata Motors Ltd, HCL Technologies Ltd and Bank of Baroda.