- Nifty was driven higher by the oil marketing stocks which gained from expectations of higher crude prices and improvement in refining margins during the current quarter. RIL and IOCL were sharply higher on Monday.
- Auto stocks are likely to come under pressure after Maruti decided to cut production by 8% due to weak demand. We expect more companies to follow suit and that is likely to impact top-line growth in the quarter.
- FIIs were net buyers to the tune of Rs.1823 crores while DFIs sold Rs. (-1269) crore on Monday. FIIs have now infused over Rs.22,000 crore in the month of March and over Rs.32,000 crore since the third week of February.
- The NASDAQ came under pressure although the DJIA was in positive territory on the back of oil stocks. Asia appears to be under pressure and we expect pressure on the SGX Nifty to get transmitted to the Indian markets on Tuesday.
- We suggest to traders and investors to unwind part of their FMCG portfolio at higher levels. With HUVR warning of weak growth in the fourth quarter, frothy valuations may be hard to sustain. Exit at least 30% of FMCG holdings.
- We expect downside pressure on consumer-driven auto stocks after Maruti decided to cut production by 8% in a clear sign of tough times. We suggest booking out of auto stocks like Maruti, Eicher and also the two-wheelers for now.
- We have been long on DLF since the levels of Rs.155 and continue to remain long with outer targets of Rs.225 on DLF in the next quarter. It is the big beneficiary of deleveraging of the balance sheet and the upside in realty stocks.
- The breadth of the market has been fading and we suggest caution on the Nifty around the 11,500 levels. Start hedging risk with put options.
