- The Nifty showed a bounce from lower levels but it is still below the 10,200 levels. The big overhang will be the Fed meet and any proposal to hike rates 4 times instead of 3 times could be negative for Indian markets.
- The political stalemate continues in parliament but it is almost clear that the No Confidence Motion is likely to be a damp squib as the requisite support is still lacking. This could be positive for stocks subject to Fed action.
- FIIs were net buyers to the tune of Rs.344 crores while DFIs bought Rs.731 crore on Tuesday. A lot will predicate on the language of the Fed in the coming days as rates will make a huge difference to the portfolio flows.
- There was some semblance of a bounce in Europe and the US but Facebook, Uber and Apple continued to be under pressure on data issues. The SGX Nifty is lower in early trades and a lot will predicate on Fed hints.
- With ONGC sharply lower at around the Rs.174 levels, we believe that the downside risk could be limited. Also oil price reaching a 2-week high is good news. Suggest buying ONGC with targets of 190 within a month.
- In the metal pack, NALCO with its low debt status and valuations much cheaper than the industry benchmark could be a good bet at Rs.65 for targets of 75-80 in the next 1 month. One can start buying selectively.
- We recommend buying two stocks from a short term delivery perspective. While Adani Ports could benefit from the No Confidence motion not going through, LIC Housing looks clearly underpriced at current market levels.
- While domestic uncertainties may not be a major worry, it is the Fed guidance on rates that could crucial. Avoid rate sensitives for now!
