- Nifty lost close to 140 points on Monday after Goldman Sachs downgraded Indian equities from Overweight to Market Weight. The worsening trade war between the US and China also took its toll on the markets.
- The rupee weakened sharply on Monday and closed beyond the 72.50/$ mark. Dollar demand continued after Arun Jaitley’s weekend package failed to enthuse the markets as it did not contain anything on NRI special deposit bonds.
- FIIs were net sellers to the tune of Rs.(-107) crores while DFIs sold Rs.(-180) crore on Monday. Fresh shorts were created in the market it was a case of more trader positions being lightened in the market.
- There were deep cuts in the NASDAQ and the Dow also corrected 1/3rd of a percent on Monday. While Asia is mixed, the overhang of a trade war will remain on Asian markets. SGX Nifty is flat and is likely to be volatile.
- Power stocks could be the silent outperformers in the current market with the resolution of power capacity nearing. Focus on stocks like Power Grid and NTPC at current levels for upsides of 15-20% from current levels.
- We suggest a bit of caution on oil marketing companies (OMCs) as despite all the rigidity, the government may be compelled at some point to pass on part of the petrol price hike to the oil companies. Even upstream could come under pressure.
- A lot of financial stocks which are quoting at the upper band of valuations like IndusInd Bank, Bajaj Finance and Indiabulls Finance could come under pressure on Monday if the Trade points to a real slowdown in global growth.
- The rupee movement and the outcome of the Goldman downgrade will continue to play on the market on Tuesday too.
