- The Nifty and the Sensex bounced back on Tuesday and was ironically led by the same stocks that led the fall on Monday. However, the markets do not appear to be too convinced and this looks more like a dead cat bounce.
- Markets are likely to be a little cautious ahead of the monetary policy on Thursday. The RBI is likely to maintain status quo on repo rates although the trajectory of inflation and rates could be hawkish, which could be negative for markets.
- FIIs were net sellers to the tune of Rs.(-377) crores while DFIs bought Rs.479 crore on Tuesday. Institutions are biding their time ahead of the monetary policy announcement on Thursday and will take a directional view post that.
- Markets across the Europe and Asia have been tepid to weak on Tuesday and we expect the SGX also to be cautious ahead of the policy. However, the tech stocks in the US did show a bounce after the hammering of the last few days.
- Tata Chemicals has been a stable mover and a lot of its future efficiencies are yet to be factored into the price. With the recent 10% correction in the stock one can buy around 710 for targets of 800 on Tata Chemicals
- We expect the vulnerable banks like ICICI Bank and Axis Bank to continue to be under trouble in the current week. One can use any bounce to sell these stocks. One can also look to buy ATM puts on both these stocks.
- With the stellar auto numbers, traders and investors must use the current level of around 340 to add on the stock with a target of 385 to 400 in a month’s time. The visibility from JLR will also benefit the stock.
- Trade cautiously ahead of the monetary policy as any hawkish tone from the RBI could spook markets substantially.
