- On Tuesday, the pressure on the frontline financials continued as the likes of HDFC Bank, SBI and Bajaj Finance came under pressure. That pressure should subside and we could see these stocks stabilizing at current levels.
- All eyes on the build up to the Fed meeting on 31st of July where the big decision on rate cuts will be taken after a very long time. The big debate now is over whether the rate cut will be 25 bps or would it be 50 bps.
- FIIs were net sellers to the tune of Rs.2608 crore while DFIs bought Rs.2625 crore on Tuesday. FIIs have now sold over Rs.11,000 crore worth of equities since the Union Budget was announced on concerns over FPI tax incidence.
- Boris Johnson at the helm meant that the UK would soon get out of the EU since Johnson has been a hard core in favour of BREXIT. This certainty pushed up European markets. SGX is under pressure and marginally down.
- We like Kotak Bank after the results and its ability to maintain its NIM at a record level of 4.5% will help the stock in further its valuations. We suggest buying the stock around Rs.1480 with targets of Rs.1600 in one quarter.
- We suggest picking up Britannia at Rs.2700-2720 levels as downside risk is quite limited. The impact of consumption slowdown is likely to be limited for the niche players like Britannia. We target Rs.3300 on the stock in 6 months.
- Notwithstanding good results, any bounce in Zee should be used to sell out of the stock. One can also look at selling the stock at around the 365/370 levels for first downside target of Rs.325 as the September deadline approaches.
- We expect the HDFC twins and the Bajaj twins to bottom out around these levels and that could offer some respite for the markets.
