- The sharp rally in the markets in the last hour on Monday was led by telecom stocks after all the 3 players concurred on the tariff hikes from December onwards. RIL touched a market cap of Rs.9.5 trillion, an all time high.
- Oil prices fell by over 2.5% on Monday and that is likely to be negative for stocks like ONGC, GAIL and IOCL. Even RIL is likely to be impacted although the impact would be minimal due to the predominance of telecom and retail in its model.
- FPIs were net sellers to the tune of Rs.915 crore while DFIs bought Rs.262 crore on Tuesday. FPIs are going slow on Indian equities in the last one week after the strength in the dollar is raising questions over rupee value.
- The Dow remained under pressure due to a strong dollar and also because the trade deal continued to look elusive. Markets across Asia are weak on trade deal worries. Meanwhile, SGX is also in the negative in early trades.
- We suggest caution on Bharti Airtel at these prices and if you are long it is time to take profits of the table. The government has not committed to any rescue package so the AGR pressure will still be an overhang for the stock.
- We anticipate further downsides on Yes Bank after the huge divergence of Rs.3300 crore reported by the RBI. The stock could now correct all the way back to below the Rs.50 mark as outlook appears hazy. Stay on the sell side.
- Long term investors can look to accumulate UPL at around Rs.550 levels for targets of Rs.610 in one month. Debt levels continue to be a major challenge for the company post the acquisition but at these prices, negatives may be factored in.
- Yes Bank could be the overhang on the markets after the massive divergence. Also telecom could face pressure if there is no package deal announced.
