- It was a combination of stocks like TCS, RIL and Kotak Bank that pulled down the markets after results were lower than expectations. Kotak took a big hit as its gross NPAs crossed the 2.46% mark; 40 bps more than last year.
- There are some big expectations on the personal tax and LTCG front that are being built up ahead of the Union Budget. A combination of fiscal incentives could be exactly what the doctor ordered to revive economic growth.
- FPIs were net buyers to the tune of Rs.6 crore while DFIs sold Rs.1420 crore on Monday. Domestic selling was quite high among the heavy weight stocks as domestic investors used this opportunity to churn their portfolios effectively.
- Markets were mixed across the US, Europe and Asia. The global markets are looking from Davos and the cues coming from the ECB meet. The SGX Nifty is flat to negative and a lot could depend on the colour of the results.
- We stay positive on Berger Paints and suggest a second entry in the stock at around Rs.560-565 range for targets of Rs.625 in one quarter. We see Berger benefiting from a bigger focus on home solutions rather a commodity approach.
- After the December quarter results, we are positive on HDFC Bank for sustaining the 33% growth in profits. The NPA accretion is marginal and should not be a cause of worry. Look to buy around Rs.1275 for targets of Rs.1350 in one quarter.
- ICICI Bank looks richly priced ahead of its results. One can look to sell out of ICICI Bank at around 535-540 range for downside targets of Rs.480 on the stock as it would struggle to justify valuations of 65 times earnings.
- After the disappointment of Kotak Bank, markets would be closely watching the performance of ICICI Bank and Axis Bank post results.
