- Even as the Nifty has held on to the 10,500 levels, despite the PNB fiasco taking its toll, the big story will be the GDP estimates for the fourth quarter. Any estimate that is 40-50 basis points higher than Q3 will be a big push for markets.
- Reliance Industries appears to have momentum in its side and has held in positive territory in the last few days, bouncing from 920 levels to cross the 950 mark. The stock could see a move back to the 1000 levels.
- FIIs were net sellers to the tune of Rs.(-907) crores while DFIs bought Rs.1047 crore on Tuesday. FPIs have sold over $2 billion in equities during the month of February and the Fed rate hikes could actually accentuate this trend.
- The US did see a bounce in early trades after Jerome Powell’s statement on Fed rates. Most of Europe and Asia ended in the negative. The SGX Nifty is also quoting in the negative territory although 10,500 Nifty may remain the support for now.
- We have been advising caution on PSBs for quite a few days and we believe that banks like IDBI that have rallied may be good selling candidates. The downside risk on PNB may be limited but the negative news flows need to stop.
- The two stocks in the financial sector that look less vulnerable to the NPA menace are Indiabulls Housing Finance and Bajaj Finance. This is the time to accumulate both these stocks with 20-25% upside targets in 3 months.
- The good news on Coffee Day Enterprises may be that the promoters are finally increasing their stake in the company. The stock has corrected from higher levels to around 315 and may offer a good opportunity for buyers.
- Sticking to quality is critical in these markets. Stick to stocks like Indiabulls Housing, Bajaj Finance and also add Tata Motors at lower levels.
