- The markets bounced on Monday on the back of a rally in consumption stocks. The tax tweaks were expected to encourage consumption at the cost of savings and that is likely to boost the demand for goods and services.
- Chinese markets cracked on Monday by over 8% and that will remain the overhang for Asia and India. The virus scare appears to be getting bigger and markets are already awaiting the $174 billion stimulus package promised by China.
- FPIs were net sellers to the tune of Rs.1200 crore while DFIs bought Rs.1287 crore on Monday. Over the last week, the FPIs have turned risk-off and have been selling out of EMs like India. Budget also disappointed most of the FPIs.
- Technology stocks rebounded in the US markets even as Europe showed signs of a bounce. Most of Asia bounced back on Tuesday including the Chinese markets even as the SGX Nifty has opened in the positive territory.
- We stay positive and reiterate our buy call on Sun TV at the price of Rs.460 as it consolidates to become the biggest media player across India. Sun is likely to benefit the most from the problems at Zee. Target Rs.550 in one quarter.
- 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.
- SBI is reasonably priced after its 20% fall from the peak. The valuation from the SBI Cards IPO and also the hidden value of SBI Life and SBI MF are likely to enhance the valuations of the bank. Recap may have limited impacted on SBI.
- Asia has seen a bounce on China stimulus hopes and it remains to be seen if this bullishness can be sustained in the coming days.
