- The rally petered out on Friday after SBI disappointed the street with the third consecutive quarter of losses. This time the losses were due to front-ending of the provision for investment depreciation.
- The markets are likely to be worried in the light of the Turkish Lira crisis which exposes the vulnerability of most emerging market currencies where the dollar debt levels are quite high. Turkish Lira cracked by 17% on Friday versus the US$.
- FIIs were net sellers to the tune of Rs.(-511) crores while DFIs bought Rs.458 crore on Friday. Interestingly, the FIIs have infused close to $1.3 billion into Indian stocks in the first week of August.
- Global markets are a sea of red as the combined impact of the Turkish Lira crisis and the trade wars are taking its toll on the markets. The SGX Nifty is hovering well below the 11,400 mark and could remain under pressure.
- One should look at taking a contrarian view on SBI at current levels. With most of its investment losses being front-ended, the bank looks poised to turn around to profitability. One can buy SBI with price target of Rs.360 in one quarter.
- With oil stabilizing and the activity on the oil investments front picking up, the focus could shift back to the stocks that are into drilling services. One can look to buy Selan Exploration at Rs.250 for targets of Rs.350 in one quarter.
- Hindalco announced robust quarterly performance with aluminium realizations at all-time highs and copper benefiting from the Tuticorin shutdown. Target buying Hindalco for targets of Rs.270 in one quarter.
- The Nifty is likely to remain weak on Monday in the light of the global cues. One needs to watch the outcome of the Turkish crisis closely.
