- There is likely to be greater clarity on the Karnataka issue after the Supreme Court Judgement on Friday but the real worry may be on the Brent Crude front which has crossed the $80/bbl mark after almost 3½ years.
- Steel stocks could be back in the reckoning with the massive expansion plans and inorganic growth lined by large steel companies. Stocks like JSW Steel and Tata Steel look fairly underpriced even at current levels.
- FIIs were net sellers to the tune of Rs.(-831) crores while DFIs bought Rs.729 crore on Thursday. FII selling could become a little more pronounced with the MSCI rebalancing likely to lead to $450 million of outflows.
- Europe was strong and the US markets were slightly tentative but the real pressure is seen in Asia where the huge dollar debt burden is back to haunt. The SGX Nifty is trading lower and oil and dollar may put further pressure on the Nifty.
- The better than expected quarterly numbers may help Sun Pharma find a temporary bottom level. At aroundRs.460, the downside risks are quite limited and one can buy for a trade with a target of Rs.530.
- Tata Motors could have a good value bet around the Rs.310 mark. With better traction on JLR numbers and also on domestic passenger car and HCV sales, it would be a good trade with a target of Rs.360-370 in a quarter.
- The big surprise could come from IT companies, both on the large cap and mid cap space as a result of a weak INR. The depreciation has been more than anticipated. We like TCS, Infosys and Hexaware at these prices.
- Expect volatility in the market with the lethal combination of Karnataka judgement, oil prices and a weaker rupee.
