• Nifty closed at an all time high level of 11,387 even as select banks like ICICI Bank, Axis Bank and SBI made smart gains during the day. Banks have recovered the losses of Thursday and more in the last couple of trading sessions.
  • Despite the stellar listing of HDFC AMC, most of the short term upsides appear to be factored into the stock price. It is already quoting at twice the valuation of Reliance AMC in terms of share of AUM expressed as market cap.
  • FIIs were net buyers to the tune of Rs.248 crores while DFIs bought Rs.219 crore on Monday. FIIs turned into net buyers in July to the tune of Rs.2300 crore hinting that the worst fears of US rate hikes may already be built in.
  • Global markets were mixed on Monday with Asia mixed in response to Trump’s sabre rattling in its trade war with China. The SGX Nifty continues to be positive territory and will be driven largely by Asian cues today.
  • Titan has been quite volatile in the recent past on the back of growth concerns. With the stock priced at around Rs.900, the downside risks are limited and one can look to target Rs.1000 on the stock in the next couple of months.
  • With the HDFC AMC listing today, which is likely at a premium, one can look to buying Reliance AMC, which is quoting at half the valuations of HDFC AMC. It may offer a more reasonable value at Rs.267 with targets of Rs.300.
  • We may be back in froth territory in some of the private banks with a larger share of doubtful assets like ICICI Bank and Axis Bank. Short term upsides may be capped and one can look at building shorts through futures or through put options.
  • We can expect some rapid up moves in the market but is likely to be backed by higher levels of volatility.

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