- The outcome in the state elections in Karnataka could spook the markets on Monday as markets are likely to react negatively. Oil prices and a weak rupee will continue to be an overhang on the markets.
- It will be interesting to see how the bank loss recovery plans and how the funds are utilized. The NCLT got a boot with the first completion of sale of Bhushan Steel to Tata Steel. Banks are expecting write-back of Rs.100,000 crore this year.
- FIIs were net sellers to the tune of Rs.(-166) crores while DFIs bought Rs.150 crore on Friday. We expect some further institutional selling in stocks from domestic and foreign investors and oil and rupee remains the big overhang..
- Markets across the US and Europe are quite jittery and the SGX Nifty appears to hinting at further downsides in the Nifty. The Karnataka may just be the trigger for markets to go deeper into the red from here.
- The better than expected quarterly numbers may help Sun Pharma find a temporary bottom levels. At aroundRs.460, the downside risks are quite limited and one can buy for a trade with a target of Rs.530.
- The dark horse in the coming week could be the PSBs, especially banks like PNB and BOB which could benefit from the massive write back of NPAs once the NCLT resolution is completed.
- It would be better to play this market with the safe plays like Kotak Bank, Bajaj Finance and Hindustan Unilever where the downside risk is limited and the gradual upsides look a lot more likely.
- Expect volatility in the market with the outcome of Karnataka judgement, oil prices and a weaker rupee.
