NIFTY APPROACHES MISSION 11,500

  • It was a day when the Nifty was led by oil stocks and banking stocks as the Nifty crossed the 11,450 mark. With the rate hikes being front-ended in August and the US holding status quo, the Indian markets are breathing more freely.
  • With oil stabilizing in the range of $70-80/bbl and both BPCL and HPCL announcing GRMs in the $7/bbl mark, we are likely to see sharp upsides in both the stocks. Target 25-30% upsides on both the OMC stocks.
  • FIIs were net buyers to the tune of Rs.569 crores while DFIs sold Rs. (-30) crore on Wednesday. The consistent by the FIIs, albeit small, is a sign that at least the worries of risk-off flows may be largely misplaced for now.
  • Most European and Asian markets have been flat to negative on Wednesday but the slight fall in oil prices should come as a relief to most net importers. The SGX Nifty is almost flat in early trades and should wait for cues from Asia.
  • China reporting a current account deficit for the first half is good news for the metal companies which are relying on robust imports from China to support their demand. Expect upsides on stocks like Hindalco, Vedanta and Tata Steel.
  • With oil stabilizing and the activity on the oil investments front picking up, the focus could shift back to the stocks that are into drilling services. One can look to buy Selan Exploration at Rs.250 for targets of Rs.350 in one quarter.
  • Tejas Networks that had lots of froth built into it has corrected more than 50% in the last 1 year and has stabilized around the Rs.260 mark. One can look for a short-term trade on the stock for targets of Rs.300.
  • The Nifty may not consolidate above the 11,200 mark for now and traders can focus on the range of 11,200 to 11,500 for the month.

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