- Focus largely shifts to the G-20 Summit over the week end wherein the leaders of the US and China will be meeting to resolve the trade dispute. Trump has hinted at a resolution and that is what the markets would be betting on.
- Oil prices rallied sharply on Wednesday to above the $66/bbl mark after the US reported a sharp fall in stockpiles and a large refinery shut down. Combined with the Middle East situation, this could keep the pressure on oil prices.
- FIIs were net buyers to the tune of Rs.106 crore while DFIs sold Rs.52 crore on Wednesday. FII action continues to be tepid over the last few days as global investors are sizing up oil. Indian debt continues to be attractive.
- US markets ended in the positive after indications of dovish rates played in favour of equities. Europe was mixed ahead of key BREXIT decisions although Asia was largely positive. SGX Nifty is marginally in the positive territory.
- Downstream oil makes a good short side play with heightened geopolitical risk in the Middle East. We suggest selling into stocks like IOCL, BPCL and HPCL for the short term with 10% downside targets on all the 3 stocks.
- Ahead of the G-20 meeting, with positive signals coming from the US, we could see a rally in mining and metal stocks. We suggest buying Vedanta at around Rs.176-178 for targets of around Rs.200 in one month time period.
- Long term investors can look at buying Biocon at the current market price of Rs.250 for upside targets of Rs.300 in the short term. The company has corrected sharply and could be least vulnerable to the Form 483 challenges.
- The forthcoming G-20 Summit in Osaka and the oil prices in the Brent market could be the key triggers to watch out for this week.
