- It truly was an intriguing day of trade with the Sensex bouncing over 400 points from the lows of the day. With the war fears receding and oil prices falling, the Nifty and Sensex staged a smart bounce to close above 10,500
- The markets continue to be in an uncertain zone but with major short positions still stuck at lower levels, one can rule out a further spurt in the market driven by short covering. In fact covering could take the Nifty above 10,600 too.
- FIIs were net sellers to the tune of Rs.(-308) crores while DFIs sold Rs.(-29) crore on Monday. Obviously, the institutional impact was minimal with most of the impact coming from retail, HNI and proprietary desks..
- The NASDAQ and the Dow are up by over 1% with the fears of war receding in the Middle East. While Europe came under pressure, the SGX is still flat to positive. The direction will still depend on the Asian cues tomorrow.
- We expect oil prices to move up by another $4-5 immediately in the Brent market. This is not great news for oil downstream with more subsidy burden coming their way. We stay short on HPCL, BPCL and even on IOCL.
- One should look at quality stocks that have corrected sharply from higher levels. Two such stocks for investment would be Tata Motors and LIC Housing Finance at these levels for a 25-30% upside from current prices.
- With pressure coming from the US, India may be inclined to let the INR strengthen versus the dollar. That would be broadly negative for IT, Pharma and auto ancillaries and one need to be cautious on these sectors.
- While markets bounced back on Monday, there is still a lack of conviction. One can either trade hedged positions or with strict stop losses.
