- The Nifty and the Sensex did show a sharp bounce on Wednesday supported by a bout of short covering a day ahead of the F&O expiry. Consumer stocks remained under pressure during the day.
- Metal stocks are seeing some buying interest in the market after the sharp correction in recent days. The revival in China post the trade dispute could be the key to the future of metal stocks. Buy Tata Steel and Vedanta.
- FIIs were net buyers to the tune of Rs.713 crores while DFIs bought Rs.113 crore on Wednesday. FIIs were net buyers on Wednesday after a very long gap and it needs to be seen if the trend can be sustained.
- European markets were strong on Wednesday on the back of BREXIT hopes and a view that the US-China spat should get resolved. The SGX Nifty is again under pressure in early trades and that should keep the pressure on stocks on.
- With the strong turnaround in the APIs business post the Chinese shutdown of factories, Indian API companies have hopes for the coming few quarters. We pick Cipla in the API pack at Rs.539 with targets of Rs.600 in one quarter.
- We believe that Zee may be once again ready to be sold in the range of Rs.440-450 as the larger group related problems and the infrastructure funds locked up is an overhang. One can target for the stock to go below the Rs.400 mark.
- In the extraction space, we stay positive on Oil India at the current price of Rs.175 with targets of Rs.220 in one quarter as it still factors in a much lower realization on crude oil per barrel. Also, it remains a good dividend yield play.
- After the bounce, we are not changing our calls for the day and shall give fresh calls after the F&O expiry.
