- The US Fed cut rates by 50 basis points in an emergency move. Despite the Dow jumping 500 points in response to the announcement, it later gave 1200 points from the peak to close 732 down. Markets worried about the slowdown hint.
- Focus will now be on the RBI to see if it follows the Fed narrative, especially after the RBI governor had given a hint that the RBI was open to stimulus. The only concern for the RBI would be the level of inflation.
- FPIs were net sellers to the tune of Rs.2416 crore while DFIs bought Rs.3135 crore on Tuesday. FIIs have now sold over Rs.14,000 crore in equities in the last 7 trading sessions and continue to sell on the debt side also.
- The Dow and the NASDAQ took deep cuts of 3% despite the rate cut. However, European markets were more positive with around 1% gains. Some Asian indices like the Nikkei and KOSPI have bounced though SGX Nifty is still in the red.
- Time to bet on a revival in the Indian markets after the sharp bounce in the US. One good way to play will be purchasing ICICI Bank at around Rs.505 for very short term targets of Rs.530 on the stock. Trade with strict stop losses.
- We have been selling into ITC since the levels of Rs.240 and continue to be negative on the stock even at Rs.194 levels. Sell ITC on any bounce close to Rs.200 for lower targets of Rs.180 and Rs.175 on the stock.
- NMDC has lost over 30% from its recent peak and that covers most of the short to medium term risks on the stock. Dividend yield is still at attractive levels and one can look to accumulate NMDC at these levels for targets of Rs.120 in 1 month.
- The RBI action will be closely watched by the market to see if it follows suit on the rate cuts front at this juncture.
