- In a surprising day of trading, the Sensex closed nearly 200 points higher on a day when the RBI governor had resigned and the BJP had lose 3 of the key assembly seats of MP, Chhattisgarh and Rajasthan.
- The appointment of Shaktikanta Das as RBI governor may be seen as a more favourable and munificent regime for banks and NBFCs. These stocks could benefit from the new governor appointment.
- FIIs were net sellers to the tune of Rs.(-2421) crores while DFIs bought Rs.2256 crore on Tuesday. The support for the markets came from domestic institutions even as global investors remain cautious of the stalling of reforms process.
- European markets were sharply up on Tuesday as were most of the Asian markets. The SGX Nifty is still quite tentative although it will depend on how the markets react today to the outcome of the Assembly results and the new RBI chief.
- Watch out for banks like Yes Bank and Kotak Bank which are likely to see some rapprochement with respect to their current situation. Most PCA banks could also benefit from a more bank-friendly regime.
- The consumer story may take a hit after the recent worries at the national level. Markets are already worried that any reverses in the states could lead to a stance shift by the government. Need to play cautious on consumer stocks.
- Traders can look to buy DLF at around Rs.172. The shift in regime at the RBI is also likely to ease the flow of funds to NBFCs and that will mean flows to realty companies being easier. DLF could be a sentimental beneficiary with TGT Rs.200.
- Markets are expected to react in the first half to the BJP losing all the 3 states to the Congress in the Hindi heartland.
