- Despite the sharp rise in the Nifty we continue to be cautious considering the VIX remaining at elevated levels of 28.3. That is indicative of short covering consider that Thursday was the weekly F&O expiry day.
- The Middle East crisis has taken Brent Crude to above $75/bbl and it is back close to the recent peaks. We also expect the rupee to face pressure once crude goes above $75/bbl, which is likely with tensions in the ME rising.
- FIIs were net sellers to the tune of Rs. (-953) crore while DFIs bought Rs.948 crore on Thursday. FIIs have now sold close to $1.5 billion in Indian equities since the beginning of the month of May as political uncertainty builds up.
- The US and European markets were sharply up on Thursday with better than expected results from Wal-Mart and Cisco. The housing and jobs data also turned out better. SGX Nifty is flat and could face pressure on the last day of the week.
- We find this market best suited to sell vulnerable stocks on every rise. Our best candidates to short are Zee Entertainment, Yes Bank, IndusInd Bank, HPCL, BPCL, Dewan Housing, and Jet Airways.
- Tata Chemicals is quoting close to it is yearly low and should benefit from the proposed sale of its consumer division to TGBL. It should help them to monetize assets and also to focus more on soda ash. Target Rs.650-660 on the stock.
- We see merit in buying Infosys as a hedged bet at Rs.733 with the target of Rs.800 in one quarter. We expect attrition to improve and operating margins to become better in the next few quarters.
- Traders can be low on Friday considering it is the last day of the week and also risks over the weekend in the Middle East.
