- With the shift to external benchmarking of loans, the banks are expecting their bottom-line to take a hit. This has resulted in offloading of bank positions and that pressure is likely to stay. Banks exposed to auto loans have come under pressure.
- The positive cues from the US and China will continue to be positive for the metal stocks and we see steel and aluminium stocks benefiting immensely from this move. We can see further upsides in stocks like Tata Steel and Hindalco.
- FPIs were net sellers to the tune of Rs.561 crore while DFIs bought Rs.699 crore on Thursday. FIIs have sold close to $650 million in equities in just the last 3 days. This has been largely driven by risk-off trading by the foreign investors.
- There was a sharp rally in the US markets, especially NASDAQ. UK took a hit after the PM’s brother quite the party. EU and rest of Asia have been buoyant. For Indian markets, the real risk stems from domestic factors on the banking front.
- We continue to stay cautious on auto stocks as the GST cut needs to be implemented and may still not address the demand slowdown. We remain negative on Ashok Leyland as well as Mahindra & Mahindra.
- One can look at a contrarian buy on BHEL with all the accretions it has seen to its order book. At Rs.50, the downside risk is quite limited and one can look to buy with upside targets of Rs.70 in one quarter.
- We have been talking about pressure on ICICI Bank and it is time to again start selling the bank for lower targets of Rs.350. The exposure to auto sector and the new benchmarking is likely to hit the stock hard.
- While the market could open strong on global cues, weekend worries will prevail on the stock during the day.
