SHORT COVERING IN BANKS TAKES NIFTY HIGHER

  • The rally in the Nifty was led by Axis Bank and ICICI Bank with short covering on both these counters taking the markets higher on the weekly expiry of the Bank Nifty. The trend may not really sustain.
  • There is a bigger worry for the world markets at this point with the Trade War between the US and China intensifying. WTO has already warned about an impending trade slowdown in the aftermath of this trade war.
  • FIIs were net buyers to the tune of Rs.371 crores while DFIs sold Rs.(-85) crore on Thursday. The numbers continue to be tepid but then FIIs have turned buyers after a long break.
  • Markets across Asia have been under pressure due to the worsening trade spat between the US and China. Asia is week in early trades and the Indian SGX Nifty is flat. Markets are likely to come under pressure later in the day.
  • The big news for the metals and oil counters could be the trade slowdown warned by WTO. Metal stocks like Tata Steel, Hindalco and Vedanta could come under pressure even as stocks like BPCL and HPCL could benefit from lower oil prices.
  • 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.
  • Paints have few things going for them. Apart from a market push via lower GST rates, paints are also likely to gain from lower input costs. Look at stocks like Asian Paints and Kansai Nerolac for 10-12% upsides.
  • The Nifty may face immediate resistance at around the 11,500 levels and that may take some doing to really get the better of.

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