- Markets were a little uncertain ahead of the monetary policy and in the light of the weak GDP numbers. However, the alacrity shown by SEBI an NSDL in addressing the Karvy issue was taken in positively by the markets on Monday.
- The OPEC meet will be closely watched in this week after the OPEC members have expressed keenness to increase the supply cut to 1.6 million bpd. This is likely to hold prices higher and could be negative for India due to import dependence.
- FPIs were net sellers to the tune of Rs.1731 crore while DFIs bought Rs.754 crore on Monday. FPIs have been selling aggressively in the last couple of days but that looks more like a year-end adjustment of portfolios; which is the norm.
- There was a sharp-sell off across the US and European markets as Donald Trump’s decision to impose higher tariffs on Latin America raised the spectre of a global trade war all over again. Chinese trade deal has also been elusive.
- The telecom fare hike is likely to be a big game changer for the telecom companies although Jio could benefit the most in terms of profitability. We suggest buying Reliance Industries at Rs.1550 for targets of Rs.1650 in one month.
- Banks like Bajaj Finance and ICICI Bank may be in trouble due to their exposure to Karvy. With the pledged shares removed, most of these financers may be left with unsecured loans. The sentiments are likely to remain negative for these stocks.
- With auto numbers showing some signs of picking up, the time may be right to pick on some underpriced stocks. Mahindra & Mahindra at Rs.532 may be a good way to play the bottom of the auto sales with targets of Rs.600 in one quarter.
- We need to watch out for the global trade war and the larger implications of Karvy case due to its deep implications for the market place.
