- The concerns over higher NPAs in some private banks and weak results expected from autos and FMCG companies have put pressure on the markets. The global situation in Iran is also getting geopolitically sensitive.
- Markets may be broadly concerned about weak petchem business at RIL (one of its cash cows), higher Gross NPAs in HDFC bank and higher spillages in the case of RBL Bank. This could be a hangover for the market as a whole.
- FIIs were net sellers to the tune of Rs.950 crore while DFIs bought Rs.734 crore on Friday. FPIs have till date sold nearly Rs.7,700 crore ($1.2 billion) worth of equities since the Budget announcement on July 05th.
- It is hardly surprising but most of Asia is under control as the risk of a weak Chinese growth is beginning to weigh on these economies. SGX Nifty is also in the red and is likely to see a volatile week ahead of the monthly F&O expiry on Thursday.
- Private Banks may be under pressure especially where we have seen a rise in spillages. We are negative on RBL Bank over larger spillage issues and suggest selling the stock around Rs.500 for lower targets of Rs.460.
- We suggest booking out of Wipro as the stock has gotten into the expensive zone of P/E above 21 times earnings. One can instead look to switch to Infosys for traction in the next few quarters with targets of Rs.825 on Infy.
- Titan may be a good defensive bet after the sharp correction in the last few weeks. The stock has corrected over 20% and at around Rs.1090, there is limited downside risk. Buy with target of Rs.1250 in the next one quarter.
- The situation in the Middle East could hold the key to oil prices as Iran has thrown the gauntlet with the seizure of the two oil tankers in the Persian Gulf.
