- The markets came under pressure despite falling crude prices as concerns over global growth came back to haunt the markets. The loss over 100 points with a 1:5 A/D ratio clearly indicated at all round selling in markets.
- With the Dow down by over 600 points on Monday and the European and Asian markets also down, the impact should be felt by the Indian markets too. CPI inflation and IIP growth left a lot to be desired.
- FIIs were net buyers to the tune of Rs.832 crores while DFIs sold Rs. (-1074) crore on Monday. There was the clear pressure of redemptions on domestic investors and there was also heavy selling by traders unwinding positions.
- A virtual carnage of nearly 3% on the Dow, NASDAQ, and Nikkei are likely to rub off negatively on Indian markets. The weaker oil prices are hinting at slowdown worries. SGX is already down 44 bps and Asia could weigh.
- We suggest playing the market overall on the short side with a downward bias in banks and auto stocks. In fact, wherever there have been valuation excesses, the stocks are likely to be more vulnerable
- It may be the right time to start picking up Yes Bank which is almost 50% below its peak price. The IL&FS effect may not really hurt and this may also give an opportunity to buy DCHL at current prices. Look for 30% upsides on both stocks.
- After the sharp 30% correction from higher levels, Adani Ports and SEZ is a good buy around the Rs.335 mark for targets of Rs.400 in the next one quarter. Mundra port traffic is still likely to see record volumes.
- While one can look to selectively pick stocks in the market on Tuesday, the overall undertone is likely to be negative. Trade accordingly.
