- The budget disappointed three of the largest constituencies of the market viz. banks, insurance companies and consumption stories. With no consumption incentives, the Sensex fell by close to 1000 points on Saturday.
- The overhang of the special session on Saturday could continue on Monday too. However, the Chinese stimulus of $174 billion could offer some support to the markets at lower levels so that should act as a support to Indian equity markets.
- FPIs were net sellers to the tune of Rs.1200 crore while DFIs bought Rs.37 crore on Saturday. Despite the late selling, the markets closed the month of January with net equity inflows of nearly Rs.12,100 crore with equal selling in debt.
- Most European markets and the US were down by over 1.5% on Friday ahead of the BREXIT action. However, it was smooth on paper though impact will only be known over time. Asia is deep in the red but China stimulus may support it.
- We are positive on Bajaj Auto after the extremely positive results and the strong export performance. Traders can look to buy Bajaj Auto around Rs.3140 for targets of Rs.3300 in one month time frame.
- Tech Mahindra could be a big beneficiary of the government decision to allow Indian technology companies to set up data centre parks on the lines of STPs. Look to buy TECHM around Rs.800 for targets of Rs.850 in one month frame.
- We see ITC going below the Rs.200 mark so use any bounces to sell the stock with targets of Rs.180 as we see the budget announcement of duties on cigarettes to be a long term negative for the stock. Use bounces to consistently sell ITC.
- It is hoped that the Chinese stimulus could give some respite to the fall in the Indian markets and give them reasons to take support at lower levels.
