- Markets sustained higher levels for the fifth day in succession making it one of the most productive Muhurat weeks in recent times. Of course, the F&O expiry volatility did result in the indices losing value from higher levels towards close.
- PSU banks are betting heavily on a revival in profits, despite higher levels of gross NPAs. In the last 3 days, PSU banks have rallied sharply and SBI has led the pack. On Thursday there was divergence of returns between private and PSU banks.
- FPIs were net buyers to the tune of Rs.1871 crore while DFIs sold Rs.651 crore on Wednesday. FPI infused more than $2.2 billion into equities in the month of October, although it included the HDFC Life block deal of Rs.6000 crore.
- Global markets were relatively weak with the UK correcting more than 1.2% on the back of BREXIT uncertainty and an impending election on December 12. The SGX Nifty continues to remain in positive territory but Asia could hold the key.
- We again reiterate our buy call on Infosys and suggest buying more of the stock at Rs.687 with targets of Rs.750 and Rs.780 as most of the whistleblower allegations appear to be hypothetical with little by way of evidence.
- We reiterate our Buy call on SBI and suggest adding more of the stock at the level of around Rs.290 for first target of Rs.330 and Then Rs.360 in one quarter. Likely to benefit from lower NPAs and also from SOTP valuations.
- We advise caution on Axis Bank after its latest results and suggest selling the bank at around Rs.735 to Rs.740 levels for targets of Rs.660 on the downside. Asset quality and consumer defaults could hit the bank quite badly.
- Nifty is just a little over 100 points short of 12,000 and that could make the rally more sustainable from here on.
