- The Nifty finally showed some strength on Thursday and Friday after correcting for 6 days in succession. A lot will now depend on how the rupee and the bond yields behave and some stability at these levels should help.
- The positive for the markets will be the SEBI assurance to the FPIs that the NRI restriction on beneficial ownership of FPIs will be appropriately diluted. This will be a sentiment booster for global investors in the coming year.
- FIIs were net buyers to the tune of Rs.38 crores while DFIs bought Rs.942 crore on Friday. FPIs may show some positive reaction to the Friday announcement on dilution of NRI restrictions for Category 3 FPIs in India.
- While the US came under pressure on Friday night, the whole of Asia appears to be under pressure on Monday morning with cuts of over 1%. Even the SGX has lost ½% in early trades and the Asia factor could weigh on the markets.
- As we said, the big focus will continue to be on the pharma space. Aurobindo looks good after the recent Sandoz unit acquisition and the stock could see another 20% upside from current levels. We also like Lupin at current levels.
- The big story to watch out for could be Yes Bank after its very strong retail focus in the next few years. The stock is already down by 20% and that should give a good entry point. Buy around Rs.320 levels for targets of Rs.380 in 1-2 months time.
- With the big thrust to electric cars by Mr. Gadkari, the focus could shift back to Tata Motors and Mahindra & Mahindra. While costs are still an issue, one can still look forward to upsides of 15% on both the stock in the next 1 quarter.
- There appears to be a sense of panic across Asian markets and Asian currencies. That could make the INR vulnerable and spill off on markets.
