- Markets resume trading on Friday after a trading break on Thursday. The pressure is expected to continue and most long positions may choose to be a little wary ahead of the weekend. Use market bounces to play on the short side.
- Rupee did show some strength of close to 100 bps on Wednesday but it remains to be seen if the RBI will continue to support the rupee. The rupee has appeared quite vulnerable in the absence of RBI support at lower levels.
- FIIs were net sellers to the tune of Rs.(-2185) crores while DFIs bought Rs.1201 crore on Wednesday. It has been one the largest bouts of FII selling, and the focus has been on some of the financials with steep valuations.
- Markets across the US, Europe and even in Asia have shown strength over the last trading session. Indian SGX Nifty is also trading nearly 50 bps higher in early trades. However, it remains to be seen if the uptick in the Nifty can be sustained.
- 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.
- Yes Bank could come under pressure due to the management shift concerns and the spate of downgrades from these levels. One can look to accumulate at lower levels if a suitable alternate CEO is appointed well in advance.
- We could see a shift in buying interest in favour of PSU banks. Potential merger candidates may see the benefits of synergy getting reflected in prices. Private Banks and financials may come under pressure on valuation concerns.
- A lot of the market movements will still predicate on the rupee. Valuation roll down in some richly valued stocks.
