- Despite the forex and the money markets being closed on Tuesday, the equity lost most of their gains towards the end of trading. In fact, the Sensex lost nearly 500 points from the peak of the day on flat A/D ratio of 25:24.
- Tuesday should come as a real disappointment for markets as it marked the 9th consecutive day of correction for the markets. The Sensex has lost 1623 points over the last 9 days with IT leading the downturn on Tuesday.
- FIIs were net sellers to the tune of Rs.(-814) crores while DFIs bought Rs.1164 crore on Tuesday. The FII selling has sustained and has now more or less neutralized the inflows during the first week of February.
- Even as the US and Europe were mixed ahead of the trade talks conclusion on Wednesday, most of Asia was in positive territory. The SGX Nifty is also in positive territory but it needs to be seen whether it can be sustained.
- With the strong turnaround in the APIs business post the Chinese shutdown of factories, Indian API companies have hopes for the coming few quarters. We pick Cipla in the API pack at Rs.539 with targets of Rs.600 in one quarter.
- We believe that Zee may be once again ready to be sold in the range of Rs.440-450 as the larger group related problems and the infrastructure funds locked up is an overhang. One can target for the stock to go below the Rs.400 mark.
- In the extraction space, we stay positive on Oil India at the current price of Rs.175 with targets of Rs.220 in one quarter as it still factors in a much lower realization on crude oil per barrel. Also it remains a good dividend yield play.
- One can look for some bounce ahead of expiry on the back of short covering. Traders will have to play their cards smart and short.
