- The news flows have not been too positive in the last few days. The weak GDP data and the tepid core sector data pushed the markets lower. With a sharp single day fall, the worry would be more on the long covering front of open positions.
- With major sectors like banks and autos under pressure, the markets could continue to remain under pressure. The weak manufacturing data from the US has also raised the spectre of a slowdown in global markets.
- FPIs were net sellers to the tune of Rs.2016 crore while DFIs bought Rs.1251 crore on Tuesday. FII selling on Tuesday was much sharper and reflects a clear risk-off strategy being adopted by these players in the market.
- The US markets lost ground on Tuesday after the US manufacturing data came in much weaker than expected. However, Asia has been positive on the back of China stimulus hopes and even the SGX Nifty is trading nearly 40 bps higher.
- Truck and HCV sales reported a steep 70% fall and that is not great news for Ashok Leyland even after the sharp correction. Look to sell Ashok Leyland futures in the 65-66 range for downside targets of Rs.55 in one month.
- In these volatile markets, one needs to look for comfort in dollar defensives like IT and pharma. You can look to buy Tech Mahindra around the Rrs.700 levels for targets of Rs.750 in one month on risk-off buying.
- We have been reiterating our buy call on Biocon at the market level of Rs.230-235 with price targets of Rs.270. The stock has corrected sharply despite being less vulnerable to FDA issues and having a strong research franchise.
- Market volatility could continue as the indices are likely to see unwinding pressure on every bounce in the markets.
