- There was a sharp rally in the Nifty on Monday as Tata Group stocks and Hindalco led the rally. However, the real thrust came from L&T after it announced the buyback of shares to the tune of Rs.12,300 crore.
- With L&T announcing a buyback and the IIP numbers hinting at a bounce in capital spending, the time may be ripe to pick L&T with a longer term target of Rs.2,000. It will also benefit from the revival in oil investment cycle
- FIIs were net sellers to the tune of Rs.(-483) crores while DFIs bought Rs.593 crore on Monday. The rally on Monday appears to be led more by short covering as institutions were largely subdued.
- Markets across Europe and Asia were positive on Monday. There are also hopes that the trade war may see some tempering as both the US and China are beginning to feel the pain of a prolonged trade war.
- With the gradual shift to greater usage of natural gas, Mahanagar Gas (MGL) could be a good bet at current levels of Rs.920. One can target a price of around Rs.1200 in a couple of quarters from here.
- Rain Industries against appears to a good bet after the sharp correction. The stock has bounced from lower levels but with nearly 100% growth in profits, it gives comfort at these prices. One can expect 50% returns in 1 year time.
- We reiterate our buy call on Tata Motors where the worst may be over for the domestic business and more importantly the JLR business. Buy around 255-260 for targets of 350 in one quarter on the stock.
- The X factor during the week could be the rupee value and how the trade war between the US and China pans out. Watch for impact of Bolivar.
