NIFTY BOUNCES SHARPLY, SUSTENANCE DOUBTFUL

  • The Nifty showed a sharp 220 points rise on Monday on the back of positive results from ICICI Bank and the government decision to infuse Rs.40,000 crore into the money market through the OMO route to improve liquidity.
  • Lower oil prices and a positive take on pharma from CRISIL added heft to the sector as the pharma sector emerged the top gainer on Monday with 3.5% gains. However, Tuesday begins with weak markets across the globe.
  • FIIs were net sellers to the tune of Rs.(-2231) crores while DFIs bought Rs.2527 crore on Despite the strength in markets, FPIs continued to be heavy sellers and have now crossed $6 billion sales in the month of October.
  • With the Dow and NASDAQ down by over 1% on Monday, Asia continues to be under pressure. Europe had some positives but SGX Nifty is down over half a percent on Tuesday. Asian pressure is likely to continue on the stock.
  • NBFCs still look a lot more vulnerable and don’t jump in to buy any of the stocks. Stocks like DHFL and Indiabulls Housing should still be used to sell on every rise. One can either sell futures or look to buying put options.
  • With the Kharif season over and the Rabi season also likely to benefit from higher MSP, the stock to watch out could he UPL. Buy at around 620 levels for quarterly targets of Rs.800 on the stock.
  • PSU banks could be the dark horse. With nearly Rs.1 trillion likely to come back into banks via NCLT, focus on stocks like SBI, BOB and Union Bank for 40-45% upsides during the current fiscal year itself.
  • It is time to play specific themes rather than get bogged down by the index. PSU banks may be the big story of the markets in the coming months.

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