- As the Nifty opens after a break, the pressure of global weakness is likely to impact the markets. We also expect the weak trade data with deficit at $18 billion for July to weigh in on the market sentiments.
- The rupee will again be in focus and with a weak trade data coming in on Tuesday the pressure on INR could mount. We expect the INR to close above the 70/$ mark as dollar buying pressure is likely to mount on currency markets.
- FIIs were net sellers to the tune of Rs.(-379) crores while DFIs bought Rs.391 crore on Tuesday. FII action will have to have be watched on Thursday if INR goes beyond 70/$ in the light of the trade deficit spurt.
- There was massive selling on Wednesday across the US and Europe, with Asia coming under pressure on Thursday. The SGX is showing a slightly weakness although a lot would depend on the news flows.
- As the INR weakens, the tech space may be a good place to park your bets. We recommend buying Tech Mahindra and HCL Tech for 15% upsides targets in 1 quarter as they still have valuation comfort in their favour.
- After the recent results announcements from PSU banks like IDBI Bank and Allahabad Bank, we expect the NPA worries to continue for few more quarters. Expect selling pressure on PSU banks and play on the short side.
- In the pharma space, one can look to selective buy into stocks like Lupin and Cipla at these levels where downsides appear to be limited. Buy Cipla with targets of Rs.720 and Lupin with targets of Rs.900 in the next one quarter.
- A lot would depend on the currency cues from Turkey. However, the trade deficit could sour sentiments for Indian stocks.
