- The Nifty rally on Tuesday was led by IT stocks and banks. IT stocks gained sharply after the NASSCOM projected 9.2% growth in IT services for fiscal 2020. Most of the frontline IT stocks were in positive territory.
- Auto stocks continued to remain under pressure after Maruti had announced a 26% cut in output targets for March 2019. It was essentially indicative of a larger off take problem faced by most of the consumer auto stocks.
- FIIs were net buyers to the tune of Rs.2132 crores while DFIs sold Rs. (-1254) crore on Tuesday. FIIs have now infused over Rs.25,000 crore in the month of March and over Rs.35,000 crore since the third week of February.
- While the Dow came under pressure on Tuesday, most of the other markets were flat to negative. The SGX Nifty is also flat and is likely to be driven by profit booking at higher levels of the Nifty.
- We have been talking about IT stocks for some time after the recent upgrade by NASSCOM on its growth targets. We like Infosys around the 725 levels with a price target of 790 in one quarter.
- We also like oil refining stocks on the back of better gross refining margins and also better inventory valuations in this quarter. We suggest buying IOCL at the price of around Rs.160 with targets of 195-200 in one quarter on the stock.
- 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 a balance sheet and the upside in realty stocks.
- We expect markets to be tepid at higher levels on a long weekend. Traders are advised to go the weekend with lighter positions.
