- With too many settlements clubbed due to holidays, the Nifty traders were slightly subdued on Friday leading to delivery buying taking the markets top higher levels. For now the 11,500 level may be a brief resistance for the Nifty.
- The total Nifty EPS for the first quarter at Rs.114 provides an annualized P/E ratio of 24.3 to the Nifty. On a trailing basis that does not leave much room for a Nifty spurt. A lot will depend on how PSU banks turn around in the coming quarters.
- FIIs were net buyers to the tune of Rs.147 crores while DFIs bought Rs.152 crore on Friday. The volumes were relatively thin due to the settlement holidays leading to clubbing of settlements on Monday and Tuesday next week.
- Markets across the world have been fairly lacklustre as the markets will not be awaiting the Fed stance in September after the strong growth outlook. The SGX Nifty closed Friday above the 11,500 mark, but will rely on Asian cues.
- The INR is likely to be weak on trade deficit worries and that will put pressure on the banking stocks. We specifically see PSU banks as quite vulnerable as a strong dollar could put pressure on dollar borrowings.
- The weak rupee combined with US GDP growth at 4.3% could give a big push to Indian IT and pharma companies. With margin problems still around, the top line problems may not be really challenging. Prefer Lupin, Aurobindo and TECHM.
- We reiterate our buy call on Tata Motors where the worst may be over for the domestic business and more importantly the JLR business. Buy around 255-260 for targets of 350 in one quarter on the stock.
- The X factor during the week could be the rupee value as the domestic and the global cues are still quite uncertain. Watch for the rupee beyond 70.
