- The FPI tax boost and the auto / NBFC sector boost are likely to impact the market sentiments on Monday. However, with F&O out of the ambit of exemption, the benefit for FPIs could be limited. However, auto sector may benefit overall.
- Apart from the domestic positives, the markets will also look at the worsening trade war situation with the US and China escalating the tariff situation. That will be the overhang for the Indian markets on Monday.
- FPIs were net sellers to the tune of Rs.1737 crore while DFIs bought Rs.1548 crore on Friday. FPIs sold equities worth $2 billion in the month of August although the impact was muted because nearly 75% came back as debt inflows.
- The DJIA corrected 624 points on Friday and NASDAQ fell more than 3% on trade war concerns. European market also fell by more than 1%. SGX is muted with marginal gains but global worries could largely mute the India package effect.
- We remain positive on auto stocks with focus on Eicher and Maruti, where we see another 10% upside from these levels, especially after a fairly positive auto package and promises that the GST would also be rationalized soon.
- Coal India has corrected sharply in the last few months and is now available at a P/E of just about 11. Also the dividend yield is nearly 8% and that gives sufficient scope for the stock to enhance value. Buy with target of Rs.225 in one quarter.
- We stay negative on IndusInd Bank and see another 15% downside to around Rs.1100 levels over the next one quarter as the problems of asset quality come back to hit the stock. Stay short for lower levels.
- It could be a tricky market on Monday. While the FPI package has given hope, the global market appears to be extremely volatile and may put pressure.
