- Three heavyweights; HDFC Bank, RIL and TCS likely to drive the markets this week post results. While HDFC should be positive, TCS and RIL could be neutral to negative and that could set the tone for the market trajectory.
- The markets are expecting some pre budget hints on the subject of personal taxation and LTCG and dividend tax. Any decision to scrap or reduce any of these will be seen as a huge positive for Indian markets.
- FPIs were net buyers to the tune of Rs.264 crore while DFIs sold Rs.500 crore on Friday. While FPIs have been buying equity in India through January, they have been net sellers in debt due to inflation concerns.
- Most of the US, Europe and Asia reacted positively on Friday to the positive cues from the Phase 1 of the trade deal between the US and China. Europe is also preparing for another loose monetary policy from the ECB this week.
- GAIL looks fairly undervalued at Rs.130 considering its matured business model and a more business friendly gas pricing formula. One can look to accumulate GAIL at these levels for targets of Rs.160 in one quarter.
- 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.
- On IndusInd Bank we have reached our first downside target of Rs.1350. We would suggest selling further in the range of Rs.1350-1370 for targets of Rs.1250 on the lower side as markets are likely to be unhappy with higher provisioning.
- Banks could be the focus in the coming week with ICICI Bank and Axis Bank likely to be in the limelight due to results announcements this week.
