- The combination of higher oil prices and a sharply weaker rupee added up to bring about a sharp correction in the Nifty by nearly 106 points as it got closer to the 10,400 mark on Wednesday.
- Oil marketing companies like HPCL, BPCL and IOCL continued to be the biggest laggards on subsidy fears. But these fears may be unfounded and these stocks may actually do well. Start buying in small quantities.
- FIIs were net sellers to the tune of Rs.(-311) crores while DFIs bought Rs.790 crore on Wednesday. The FII selling could actually get more acute if the INR continues to weaken from its current level of 68.42.
- Markets across Europe saw sharp cuts of over 1% on Wednesday but US was positive. For Indian markets, the key trigger will continue to be oil and the value of the rupee. More so, with the INR getting close to its all time low of 68.80.
- Aditya Birla Capital has come down in the recent past from around 150 levels to 140 levels. At these levels, the worst may be factored in and we could see the stock bounce back to the 190-200 levels in the next couple of months.
- We continue to stay positive on Tata Motors post the results. The sharp fall in profits was more due to the one-time hit of Rs.1640 crore. The stock at around 310 offers limited downside and an upside target of Rs.400 in the short term.
- Among the technology stocks, Tech Mahindra may be best poised to capitalize on the weaker rupee. Despite the rally in the last one year, we like the stock at around Rs.700 with targets of Rs.800-820 in 1 quarter.
- While markets will face resistance at higher levels, the key will be the value of the rupee. Any further weakness could be negative for the markets..
