NIFTY FACES PRESSURE AT HIGHER LEVELS

  • Nifty stocks led by the OMCs came under pressure after the US-China trade talks did not show much concrete progress and the US retail data disappointed. All eyes will now be on the Interim Budget on February 01st.
  • Oil hovered around the $61/bbl mark in the Brent market. With OPEC agreeing to cut production further if required, oil prices are expected to hover in the range of $60 to $70/bbl. Global growth rate could be the key issue.
  • FIIs were net sellers to the tune of (Rs.-345) crores while DFIs bought Rs.11 crore on Thursday. FIIs have been selling debt heavily across EMs and Aberdeen has already brought out a report to shift from Indian bonds to Philippine bonds.
  • With the rebound in the technology stocks in the US last night, the markets should remain buoyant. Nifty is expected to get closer to the 10,900 mark today although the pressure at the 11,000 level will continue.
  • The sharp rise in Brent Crude may be an ideal opportunity to buy Oil India at current levels to play on the rising crude prices. We would prefer OIL to ONGC considering that it has less of bailout commitments.
  • The huge layoffs at JLR UK of nearly 10% of the workforce will be a positive for Tata Motors as it will result in the much-needed cost cutting. We expect the stock to cross the Rs.200 mark during the month of January.
  • As we said yesterday, we stay cautious on IndusInd Bank on transparency issues. The full extent of the IL&FS exposure is not known and may accelerate write offs in the coming quarters. We target Rs.1300 on the downside for the stock.
  • We expect a cautious trading day on Friday ahead of a long holiday weekend. Avoid carrying speculative longs over the weekend.

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