NIFTY CONTINUES ITS SPURT TOWARDS NEW HIGHS

  • The Nifty showed strength even as the INR showed signs of stabilizing at around the 70/$ mark. Metal stocks led the rally on Tuesday even as Reliance and Maruti added a lot of heft to the market.
  • With the Brent crude prices getting close to $77/bbl, the concerns of higher fuel driven inflation are back to haunt the markets. With Iran sanctions looking like a done deal, oil prices could actually harden beyond the $80 mark.
  • FIIs were net sellers to the tune of Rs.(-161) crores while DFIs sold Rs.(-199) crore on Tuesday. For domestic investors, it is more a case of being cautious ahead of the macro headwinds and currency concerns.
  • Markets across the US were flat to positive, with the Dow, NASDAQ and S&P quoting at life-time highs. Asia is relatively subdued while the SGX Nifty is almost flat. There may be increased resistance at higher levels.
  • We have been pushing Vedanta since the Rs.210 levels and we see the 41 auction wins as a short term positive for the stock. One can expect targets of Rs.270 on the stock in the next 1 month time frame.
  • With the power sector likely to see a major churn, NTPC could emerge as an unlikely winner with cheap capacity available for takes. Buy NTPC around 165-167 range for targets of Rs.210 in one quarter.
  • Medium term investors appear to be missing out on LIC Housing Finance at the current level. Despite slower growth, the company looks the most attractive bet in housing finance. Buy with target of Rs.570 on the stock.
  • The focus will still be on the INR and the market will be looking at whether the INR stabilizes around the 70 levels or worsens from here on.

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