- With Bloomberg reporting that UK could be close to a BREXIT deal with the EU, the pound had reacted very positively on Tuesday. The positive sentiments could rub off on Wednesday also.
- The growth rate cuts on the global front and India front are more or less factored and may not be a major determinant of market direction. However, export companies in India may take a hit on very weak trade data for September.
- FPIs were net buyers to the tune of Rs.436 crore while DFIs bought Rs.929 crore on Tuesday. The FIIs have buying consistently over the last four days although the real thrust could only come from quarterly numbers of Indian companies.
- The US markets were in the positive as were Germany and France. However, UK stocks gave up its gains in the second half as the pound strengthened on BREXIT hopes. The SGX Nifty is building in nearly 40-50 bps positive open.
- The dip on Monday should be used to accumulate more of Infosys considering its exceptionally strong guidance for the coming year. One can look at buying Infosys in the range of 785-788 for upside targets of Rs.850 and Rs.900 in a month.
- We continue to remain positive on metals with focus on Vedanta and Hindalco. Both the non-ferrous metal companies are likely to benefit from stimulus that China is planning in the aftermath of its weak trade data.
- For more defensive bets on the pharma space and considering its strong Australia franchise, one can look to buy Strides Arcolabs at around Rs.350 for targets of Rs.400 and Rs.430 in 1-2 months time frame.
- Keep an eye on global cues as any progress on the BRERXIT front could make a big difference to the eventual EU markets.
