- The Nifty lost value from the 10,700 levels to close lower. Most banking stocks once again came under pressure while it was the hydrocarbon stocks like GAIL and IOCL that held the markets up.
- The Italian crisis is likely to weigh heavily on the Indian markets as also across most of Asia on Wednesday. The political turmoil could lead to fresh elections and also rise in demand for secession from the common currency.
- FIIs were net sellers to the tune of Rs.(-407) crores while DFIs bought Rs.578 crore on Tuesday. George Soros has been warning about a possible rush of capital from emerging markets if dollar continued to strengthen.
- Markets across the US, Europe and Asia have lost more than 1.5% and the SGX is also showing signs of a 1% cut in the indices. The Nifty may test lower levels of 10,500 today and any breach below could sharpen the fall.
- With the near resolution of Binani case after Bhushan, it could be good news for the PSU banking stocks. We suggest buying stocks like PNB, BOB and BOI at current levels for 25% upside from current levels.
- With the stellar results announced by BPCL with 25% profit growth, the stock is likely to be in positive action on Wednesday. With oil prices tempering in the Brent market, one can trade BPCL and IOCL for 20% upsides from here.
- We believe that the Italian crisis could make the Indian market into a sell-on-rises. Trade accordingly. Also for existing equity portfolios, we recommend staying hedged with put options to protect downside risk.
- The Italian crisis may have changed the short term outlook of the market. We need to see how the crisis pans out in the next few days.
