- With V G Siddhartha no more, the stress about the future of the group will be on the markets. Apart from the price impact on the stock, it is also likely to hit banks and MFs for the Rs.10,000 crore exposure that the group has.
- Quarterly results for the June quarter continued to be circumspect with most of the companies showing growth worries on the top line. Banking, autos and FMCG companies have seen distinct demand pressure during the quarter.
- FIIs were net sellers to the tune of Rs.645 crore while DFIs bought Rs.1080 crore on Tuesday. FPIs have now sold closer to $2.5 billion post the Union Budget on a mix of tax and growth concerns. CCD is also likely to be an overhang.
- Markets are tentative across the board. Germany and France took it on the chin on a consistently weakening GBP. SGX Nifty is also in the red and the domestic and global pressures on the company are likely to continue.
- We would advise investors to be cautious about ICICI Bank and Axis Bank. In both cases, the profit growth has been largely driven by factors that are not sustainable. Use higher levels to exit both the counters and look to enter at lower levels.
- Siddhartha group companies are likely to be under pressure after his untimely demise. Both Coffee Day and SICAL Logistics were on lower circuit on Tuesday and the downside pressure on the stocks is likely to continue till there is clarity.
- We suggest sticking to the safer sectors with reliance on the Indian consumer story. One can look to buy D-Mart at Rs.1450 levels for upside targets of Rs.1650 in one quarter, especially after stellar results in the current quarter.
- Look out for updates on the CCD issue and the next steps on the outstanding loans. That could drive the sentiments of the market in the days ahead.
