- If the SGX Nifty is any indication, we could see deep cuts. The sudden resignation of Dr. Urjit Patel is unlikely to go well with the markets. At the same time, the Nifty will also be influenced by how the assembly polls pan out.
- The NDF market has seen heavy selling in the rupee after the governor’s resignation and the rupee had already gone beyond 72. That could also put additional pressure from hedgers and from foreign investors.
- FIIs were net buyers to the tune of Rs.116 crores while DFIs sold Rs.(-146) crore on Monday. The RBI governor resignation is going to weigh heavily on the markets as it could have implications for central bank independence.
- The US markets saw some bounce in tech stocks after a sharp carnage but there were deep cuts in European markets. The SGX is down nearly 170 points and is likely to react negatively to the resignation of Dr. Urjit Patel.
- The negative yield worry in the US spooked metal stocks as these are the most vulnerable to a slowdown in global growth. We stay negative on Hindalco and Vedanta and estimate another 20% downside from current levels.
- The consumer story may take a hit after the recent worries at the national level. Markets are already worried that any reverses in the states could lead to a stance shift by the government. Need to play cautious on consumer stocks.
- Muthoot Finance is turning out to a smart play in the revival of NBFCs and also the stronger position that gold loan companies will find themselves in. Buy at Rs.472 for targets of Rs.550 in one quarter.
- Traders are advised to be cautious on positions in the first half till there is clarity on the RBI front and the state counting of votes.
