- The Nifty and the Sensex may face 11,000 as the immediate resistance as the monetary policy later this week could be a major overhang. Status quo on rates could be the good news for the markets.
- Our caution over NBFCs, HFCs and realty stocks continue as they are the most vulnerable to shocks in the debt markets. Auto stocks that have corrected sharply like Eicher and Maruti may offer good room for bottom fishing.
- FIIs were net sellers to the tune of Rs.(-1700) crores while DFIs bought Rs.3256 crore on Friday. There were fairly large block deals on both sides represented by the larger than normal volumes from the institutions.
- Hong Kong and Chinese markets are closed for this week. European markets were sharply down on Friday. SGX Nifty is flat but it is likely to be determined more by domestic factors and the progress on the IL&FS fiasco.
- Both ICICI Bank and Axis Bank are likely to come under pressure on the back of rising questions over asset quality. Bandhan Bank could be another casualty. In terms of banking picks, stick to IndusInd Bank and RBL Bank at these levels.
- Marico will be a good pick at around the Rs.330 levels on the back of a sharp fall in copra prices. With the recent correction in the stock price of Marico, it should a good opportunity for a 20% upside from current levels.
- We suggest investors to be cautious on NBFC shares since they are more vulnerable to debt markets shocks. Stocks like Indiabulls Finance and Dewan may be avoided even at lower prices. Stick to stocks like M&M Finance.
- All eyes will be on the RBI policy this week. While Morgan expects a rate hike, Goldman Sachs expects status quo to be maintained.
