- After a long holiday weekend, Indian markets are likely to react on Monday to the import duties imposed by the US on steel and aluminium. The big overhang will be the possibility of a full-fledged retaliatory trade and currency war.
- The SGX Nifty fell sharply on Friday which is still not reflected in the Nifty. Hence we can expect a gap down opening on the Nifty on Monday to the tune of 80-100 points. A buy call will have to be taken only after seeing global cues.
- FIIs were net buyers to the tune of Rs.242 crores while DFIs sold Rs.4 crore on Thursday. We expect further selling by FPIs on Monday and that may impact markets on the downside.
- Global markets across Europe and Asia reacted sharply down with hits of 2-3% as the spectre of US protectionist moves came by. It is expected that EU, China and Canada could react with retaliatory tariffs on US products on Monday.
- The big news on Monday will be the reaction to the auto numbers which have been stellar. One can look at selective buying positions in Tata Motors and M&M, although it would be better to let the market find a bottom first.
- With banks already getting into the mould of raising their MCLR, one can expect benefits to show up in banks like PNB and SBI. The overhang of LOUs may still be there but the worst may be over for the likes of SBI and PNB.
- Ashoka Buildcon has major road orders coming its way and its valuations are still very cheap by sectoral standards. One can look to accumulate this stock around Rs.225 levels for short term targets of Rs.260-270.
- With a gap-down opening expected on Monday, it would be more appropriate to wait for the markets to settle before taking any buy calls.
