- With the sentiments souring around ICICI Bank, the market remained cautious despite the aggressive buying seen in auto and IT stocks. The 10,200 level may still be a major challenge for the Nifty to hold above.
- The big overhang on Tuesday will be the first sign of retaliation by China in the form of 25% tariffs on US imports into China. The Dow tanked by 550 points and that is likely to rub off on markets in India on Tuesday.
- FIIs were net sellers to the tune of Rs.(-690) crores while DFIs bought Rs.413 crore on Monday. Most institutional investors will be wary ahead of the RBI credit policy on 05th which is expected to give out a hawkish tone.
- Even as Europe held in positive territory, the NASDAQ and Dow fell by over 3% on the back of Chinese retaliation and Trump aggression on Amazon. SGX is already down by 1% and the correction could be quite steep tomorrow.
- We stay neutral on automobiles and FMCG as the best defensive bets in the Indian markets. However, we suggest waiting for lower levels to buy these stocks as global shocks could destroy value in a big way.
- We expect the vulnerable banks like ICICI Bank and Axis Bank to continue to be under trouble in the current week. One can use any bounce to sell these stocks. One can also look to buy ATM puts on both these stocks.
- With Chinese retaliatory tariffs become a reality, we expect metals to be the worst affected in Tuesday’s trade. We suggest short side trades with futures and puts on stocks like Tata Steel, Hindalco and Vedanta.
- Tuesday may be a volatile and difficult market to trade. We suggest trading more on the short side on every rise. Hedge long positions with puts.
