- With China also going ahead and retaliating to the US punitive tariffs, the markets felt the pain. Essentially, the two largest economies are holding the world markets to ransom and that is plunging the markets.
- The IIP was weak on Friday and the CPI inflation came in higher at 2.92% for April. In short, the case does exist for a rate cut in the June policy. Whether the RBI goes for a rate cut or focuses on liquidity remains to be seen.
- FIIs were net sellers to the tune of Rs. (-1056) crore while DFIs bought Rs.1058 crore on Monday. In fact, the consistent FPI selling has also led to the weakening of the Indian rupee in the currency markets on Monday.
- Global markets have reacted really sharply to the trade war escalation. Dow is down over 2.5%, NASDAQ down 3.1% and Europe is down by nearly 1.5%. The SGX is showing a 1% weakness and that will take the Nifty closer to 11,000 marks.
- We reiterate our negative view on most of the vulnerable companies ahead of counting for elections. We suggest short positions in Zee Entertainment, IndusInd Bank, Yes Bank, Dewan Housing and on Maruti.
- Slow down talks in consumer demand may still be there but that is one place to hide when the markets are facing tremendous pressures on the geopolitical front. Look to buy HUVR, Britannia, Titan, and Havells for 10% upside targets.
- We expect the troubles at Tata Steel to rub off on most of the steel companies. Expect to see pricing pressure on Tata Steel, JSW Steel, and SAIL. Play short for 15% downside targets on these stocks.
- The big unknown factor could be the geopolitical risk in the Middle East. That could be a flashpoint which you need to keep an eye on.
