- The Chinese PMI number for December showed the first signs of contracting in the last 2 years and that hit sentiments across the world. Auto and metal stocks were the worst hit in the Indian markets on Wednesday.
- The sharp bounce in the Dow Jones and the NASDAQ index should give some respite to the Indian markets. Both indices were 1% down by closed in positive. Indian markets may find a temporary bottom on these counters.
- FIIs were net sellers to the tune of Rs.(-621) crores while DFIs sold Rs.(-226 crore) on Wednesday. The weak rupee also led to some aggressive selling by the FIIs on Wednesday after the weak Chinese data spooked investors.
- The Dow and the NASDAQ saw a sharp recovery on Wednesday night on the back of a bounce in financials, oil and technology stocks. Asia has reacted positively to this bounce as the SGX Nifty is also trading 40 bps in the positive.
- We stay positive on SBI as the big pick for the year. We have a target of Rs.360 on the stock as the stock is likely to recover from NPA cycle bottoming as well as a chunk of the Rs.1 trillion coming back as recoveries from the NCLT.
- We stay positive on Infosys at current levels of Rs.665 with targets of Rs.750 in 2 quarters. Apart from a flat to weak rupee, Infy is also likely to benefit from strong quarterly numbers in Dec and better customer traction.
- After the sharp correction, smart investors must use lower levels to buy auto stocks. Our focus will be on Eicher, which still has premium segmentation in the auto space. One can target 20% upsides in Eicher in one quarter.
- While the late bounce in NASDAQ and Dow is a positive, the 11,000 mark will continue to be a resistance for the Nifty.
