• The move on Monday was much smoother as the bull rally of the last half of December appears to be continuing. The slightly lower GDP estimates did not really dampen the spirits of the market.
• We see the markets taking the slightly higher fiscal deficit positively. Counter cyclical fiscal policy is the norm in most countries and if growth can be purchased by an additional 50 bps fiscal deficit, market feels it is worth it.
• FIIs were net buyers to the tune of Rs.693 crores while DFIs sold Rs.(-206) crore on Monday. Surprisingly, FIIs appear to be playing the weak dollar game by being consistent buyers in the equity market since the beginning of January.
• After a strong first week, markets globally seem to be breathing easy. The trend continues to remain up even as most of the global indices are in the positive. Even the SGX Nifty is marginally higher.
• With the bank recapitalization almost finalized, the big benefits are likely to accrue for the bigger PSU banks. We see SBI and PNB as the two biggest beneficiaries and both look good for 25-30% upsides from current levels.
• With the shift in demand pattern of calcining coke, the demand for stocks like Rain Industries appears to be really shooting up. We see the stock touching a target of Rs.650 in the next 1 quarter and traders can buy from that perspective.
• With a revival in the financial sector likely, the big beneficiaries could be the last mile financial sector companies that will benefit from rural lending. We like Equitas, Satin Credit and Ujjivan at these levels.

While we await direction from the macro data and Q3 results this week, it would be a good time to accumulate select micro finance companies.