- Even as the US markets managed to stay nearly 1% higher on Tuesday, the European markets came under pressure on continued BREXIT uncertainty and the ongoing trade war between the US and China.
- All eyes will be on the credit policy to be announced on 07th August where a 25 bps rate cut is being expected. Anything above that will be a positive surprise for the market. Rate sensitives saw short covering on Tuesday.
- FPIs were net sellers to the tune of Rs.2,108 crore while DFIs bought Rs.2,289 crore on Tuesday. In the first four trading days of August, the FPIs have already sold more than $1.2 billion worth of equities; which is extremely high.
- The US was the only market other than India that has continued to be in positive on Tuesday. Europe and most of Asia remained under pressure. A lot will depend on how the credit policy pans out, although the SGX is in negative.
- We remain negative on the metals space and have short trades on Tata Steel, Vedanta with 15% downside targets as the Chinese growth slowdown becomes more acute. We do not see any respite for now.
- We like Indiabulls Housing at the current price for targets of Rs.700. The latest quarter results were impressive despite the sectoral pressures and more importantly, the merger with LVB has also been approved.
- We had called out Zee after the INVESCO deal at Rs.365 and had suggested shorting the stock. Zee is now down to Rs.310. the stock could take support around the Rs.290 so traders can look to start booking out on shorts.
- The credit policy on Wednesday could hold the key and anything above 25 bps will be a positive trigger for the markets.
