• Friday was a bounce with a vengeance as banks and commodity stocks combined to take the Nifty to a new high. With the Fed holding rates and the RBI hinting at front-ending of rate hikes, markets are surely in positive mood.
  • With no immediate resistance visible, the Nifty may be headed for higher levels of 11,500 and beyond. Bank Nifty, with the support of PSU banks, and pharma with support from FMCG is expected to lead the market rally from here on.
  • FIIs were net sellers to the tune of Rs.(-6) crores while DFIs bought Rs.87 crore on Friday. Significantly, FIIs turned into net buyers in July to the tune of Rs.2300 crore hinting that the worst fears of US rate hikes may already be built in.
  • Markets across the US and Europe were positive on Friday on the back of US growth and BREXIT problems being probably postponed. SGX Nifty is quoting closer to 11,450 marks in early trades on Monday.
  • Eicher may come under pressure with some real competition in the 250-300 CC bikes likely to come from Harley Davidson’s India. Expect some margin pressure on Eicher as it adopts a more aggressive pricing approach.
  • With the HDFC AMC listing today, which is likely at a premium, one can look to buying Reliance AMC, which is quoting at half the valuations of HDFC AMC. It may offer a more reasonable value at Rs.267 with targets of Rs.300.
  • After the sharp correction in the stock price of NBCC to around the Rs.70 levels, the stock may be a good bet, being the largest beneficiary of the current process of infrastructure expansion. Buy with target price of Rs.110 in 3 months.
  • We can expect some rapid up moves in the market but is likely to be backed by higher levels of volatility.

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