- Last few days have been all about growth concerns. GDP growth for June quarter fell to 5%, core sector was slower at 2.1% and the PMI Manufacturing also turned up at a 15-month low of 51.2. That could be an overhang.
- Auto stocks could be under pressure on Tuesday as markets reopen after 3 days. Auto numbers for August were under pressure with Maruti output lower by 33% and Tata Motors lower by 58%. That will weigh on auto stocks.
- FPIs were net buyers to the tune of Rs.1163 crore while DFIs bought Rs.1502 crore on Friday. However, FII buying could be constrained this week due to weak growth cues coming from the manufacturing and the auto sector front.
- US futures were tepid on a day when markets were closed for Labour Day. UK markets saw a rally after Johnson announced that he may combine BREXIT with a snap election. SGX Nifty is flat but is likely to be impacted by domestic cues.
- Auto stocks could be under pressure and we expect stocks like Tata Motors and Maruti to become sell candidates on every rise. Trade accordingly. M&M and Eicher could also come under pressure on the back of weak numbers.
- With the latest court order freeing Sun Pharma of any blame, the stock could see positive going ahead. We suggest buying Sun Pharma at current price of Rs.450 with price targets of Rs.500 in one month.
- We have been reiterating our buy call on Biocon at the market level of Rs.230-235 with price targets of Rs.270. The stock has corrected sharply despite being less vulnerable to FDA issues and having a strong research franchise.
- The markets could be largely volatile on Tuesday as global and cues and domestic cues on growth could make select sectors like autos and banks vulnerable.
