- The pitch has been finally cleared for the BJP to be sworn in as the ruling party in Karnataka, which is understandable considering that they are the largest single party. This should be a sentimental boost for the markets.
- While the BJP has 15 days time to prove its majority, it should not be much of a challenge for the ruling party. From the markets perspective, this is a cue for 2019 general elections and the reforms process could be intact.
- FIIs were net sellers to the tune of Rs.(-699) crores while DFIs bought Rs.229 crore on Wednesday. FIIs continue to be net sellers due to consistent in the rise in US yields and more so with Macquarie projecting 4% level for US benchmark.
- Markets across the US, Europe and Asia were flat to positive. The SGX Nifty is also flat but may react positively to the cues coming out from the Karnataka government swearing on Thursday morning.
- We have been talking about buying Hindustan Unilever since it crossed the level of Rs.1000. We find the stock attractive even at the current level of Rs.1570 and expect targets of Rs.1800-2000 on the stock in the next 6 months.
- It is time to start private banks with doubtful asset quality once again. It is very clear that they are unable to sustain at higher levels. ICICI Bank and Axis Bank could be our prime candidates for selling at higher levels.
- The big surprise could come from IT companies, both on the large cap and mid cap space as a result of a weak INR. The depreciation has been more than anticipated. We like TCS, Infosys and Hexaware at these prices.
- Markets could get a positive boost from the swearing in of the Karnataka government as it, at least, puts an end to the uncertainty.
