- After the exit polls, the markets had rallied sharply on Monday. However, there was limited buying at higher levels and the rate sensitives gave away nearly a fourth of their gains. RIL and HUVR held the market on Tuesday.
- The markets are likely to be volatile on Wednesday ahead of the election results as the opposition parties make a desperate attempt to buttress their point. Avoid taking any heavy positions on Wednesday.
- FIIs were net buyers to the tune of Rs.1185 crore while DFIs sold Rs. (-1090) crore on Tuesday. For the second day in succession, FIIs were buyers, although a lot of that could be arbitrage positions in a volatile market.
- Global markets across the US and Europe, as well as Asia, bounced back after the US decided to go soft on Huawei. While the ban has not been lifted it has been softened. This is likely to rub off on India as is evident from the SGX move.
- Consumption could be the theme to invest in especially with the consumer staples. We like Hindustan Unilever and Britannia as short to medium term buying candidates as the new government will have a predominantly rural thrust.
- In the midst of all this volatility, the one stock that has remained weak is Zee Entertainment. We have been short on this stock since Rs.420 and expect it to go further down to Rs.290 levels from the current level of Rs.346. Trade short.
- After the solid results announced by Bajaj Auto, medium-term investors must look to buy this stock in the range of 3000 to 3020 for targets of Rs.3300 in one quarter. It is like to ride the solid export performance from here on.
- Traders must be prepared for volatility so it is better to stay light. Election expectations and global cues will drive the day’s sentiments.
