- The Sensex lost nearly 500 points on Wednesday after it failed to hold on to gains at higher levels. Profit booking at higher levels combined with global uncertainty added to the pressure on the markets during the day.
- The global concern over the Trump impeachment will be the key driving factor for the markets on Thursday. Also the F&O expiry will be a key factor for the markets as volatility is likely to continue with most shorts covered.
- FPIs were net sellers to the tune of Rs.342 crore while DFIs sold Rs.762 crore on Wednesday. With most shorts covered in the market, the F&O expiry pressure was weighing in favour of the bears in the market.
- The US markets were in the positive even as Europe was under pressure due to the global build up and a threat of slowdown. The SGX Nifty is marginally in the positive but that could change with F&O expiry volatility.
- Some PSUs could be in action on expectations that the government could look to a larger privatization effort. The government has identified names to be done in two tranches and NTPC could be a good bet at Rs.116 with target of Rs.135.
- Among the NBFC space, we do see value in Muthoot Finance. One can look to buy the stock around the 690 levels for targets of Rs.750 on the upside. The stock is likely to benefit from better gold prices and wider loan spreads.
- We expect Yes Bank, IndusInd Bank and Zee Entertainment to be under pressure on Thursday with most of the shorts eased out of the market. One can look at an intraday short trade in these counters.
- F&O expiry could hold the key to trading on Thursday being the last day of the settlement cycle. One can expect downside pressure on markets.
