- The markets saw a bounce on Wednesday but the auto sector continued to drag the overall market. With growth concerns still quite high, any bounce in the market would be met with selling pressure at higher levels.
- Metal stocks could be in the positive due to a recovery in China and their trade surplus with the US expanding for the month of July. That should keep metal prices buoyant and traders interested in metal stocks.
- FPIs were net sellers to the tune of Rs.1738 crore while DFIs bought Rs.1305 crore on Wednesday. FIIs have sold close to $550 million in equities in just the last two days despite positive efforts from the FM on the tax surcharge.
- There was a general sense of buoyancy in global markets with the US and Europe showing positive returns. The SGX Nifty is also in positive territory but the heavy FPI selling is likely to put pressure on Indian markets at higher levels.
- Truck and HCV sales reported a steep 70% fall and that is not great news for Ashok Leyland even after the sharp correction. Look to sell Ashok Leyland futures in the 65-66 range for downside targets of Rs.55 in one month.
- One can look at a contrarian buy on BHEL with all the accretions it has seen to its order book. At Rs.50, the downside risk is quite limited and one can look to buy with upside targets of Rs.70 in one quarter.
- The one sector that promises growth at current levels is the life insurance space and we are extremely positive on SBI Life. Suggest buying the stock around 825 levels for upside targets of Rs.925 in one quarter.
- While metals could continue to attract attention, autos and banks are likely to remain under pressure.
