• The price of crude against went up sharply on supply cut expectations. However, the rally may not be too sharp this time around. A lot would depend on the OPEC meeting on 06th December but supply cuts look very likely.
  • The monetary policy announcement on 05th December is expected to maintain status quo on rates. However, the market will focus more on what RBI does for liquidity with Rs.100,000 crore deficit in the money markets currently.
  • FIIs were net sellers to the tune of Rs.(-56) crores while DFIs sold Rs.(-521) crore on Tuesday. Domestic selling has been on select stocks while EM flows are likely to improve post the OPEC meeting over the week end.
  • The Dow plunged 3.5%and the NASDAQ plunged by 4% as an inverted yield curve raised concerns over future growth in the US and in world markets. UK and Asia also fell along with the SGX Nifty also trading nearly 60 bps lower.
  • We reiterate our negative view on Sun Pharma and expect the stock to dip below the Rs.400 mark. Despite the clarifications given by Mr. Shanghavi, the markets are not convinced and rightly so. Stay off or go short on the counter.
  • With oil stabilizing, most of the downstream companies are once again looking reasonably priced. We suggest buying IOCL at Rs.135 for targets of Rs.160 on the upside in the next one quarter.
  • With its string of ANDAs lined up, we suggest a buy on Aurobindo Pharma at the current price of Rs.821 with a target of Rs.1000 in the next 6 months. The stock is also quoting at reasonable valuations at this point.
  • While the MPC may not really surprise and maintain status quo on rates, the big question mark will be the OPEC meet tomorrow. Watch out!