- The sharp bounce on Friday may be largely misleading considering that the situation on the geopolitical front appears to be worsening after the US threatened sanctions on Saudi Arabia. This could alter the equations in the Middle East.
- The rupee has strengthened by close 100 bps in the last couple of days but FII selling continues to be quite steady. In fact, FIIs have sold close to Rs.26,600 crore in debt and equity in the month of October to date.
- FIIs were net sellers to the tune of Rs. (-1322) crores while DFIs bought Rs.1287 crore on Friday. FIIs have sold close to Rs.18,000 crore in equity and Rs.8600 crore in debt in the first 2 weeks of October.
- Despite the 2% rally in the NASDAQ and the 1.2% rally in the DJIA, Europe is still in the red. Asia has opened with deep losses on Monday and that is likely to spill over. The SGX is marginally weak but could get worse during the day.
- Yes, Bank may have bounced sharply from lower levels but even at around Rs.230, it continues to be a good bet considering that the management challenges are finally likely to be resolved. Target Rs.300 on the stock in one quarter.
- The TCS results were strong with a 1.50% expansion of margins. We see TCS as the best player in the IT sector in India despite valuation concerns. One can look to buy the stock for a 10% upside targets from current levels.
- We see long-term value in Eicher Motors at the current price range of around Rs.23,000 and expect the stock to get back above the Rs.28,000 mark in the next 1-2 quarters. One can play the stock selectively.
- Weak Asian cues will continue to put immense pressure on the Indian markets and any rises should be used to sell into the market.
