- Despite a smart opening, the Indian markets failed to hold higher levels as the Nifty closed below the 11,800 mark while the Sensex is still holding above the 40,000 mark. Any Sensex fall below 40,000 could actually trigger a sharp fall in markets.
- Pharma continues to be under pressure and the prolonged concern in China is only making the inventory position of most pharma companies difficult. Pressure is likely on specific stocks like Cipla, Lupin and Reddy Laboratories.
- FPIs were net sellers to the tune of Rs.2315crore while DFIs bought Rs.1565 crore on Tuesday. FPIs have been selling aggressively in the last 2 days and have sold close to $500 million with global investors going risk-off.
- The carnage in global markets continued on Tuesday as the Dow and NASDAQ ended nearly 3% down. The European markets were also 2% down as was Asia. The SGX Nifty is already trading nearly 1% lower in early trades on Wednesday.
- One can look to accumulate SBI ahead of the SBI Cards IPO at a price range of Rs.325 for short term targets of Rs.350. The SOTP valuations of SBI are likely to favour the stock as SBI Cards starts off with a valuation of Rs.70,000 crore.
- Things could just about get worse for Aurobindo after the original order of November got rescinded. Use bounces in the stock to sell for eventual targets of Rs.450 on the stock, followed by Rs.425 on the lower side.
- For the slightly higher risk investors, RBL Bank may offer a good long term buy as it addresses most of its asset problems and that is already factored in the stock price. Look for upside targets of Rs.350 from the current price of Rs.310.
- The pressure on the Indian markets could stay on Wednesday. However, expect some short covering in pharma and metals ahead of expiry.
