- The Nifty was marginally down on Tuesday on worries that the Fed may give a hawkish tone in its May meet. A hawkish tone is not good news as it could nudge the RBI towards hiking its repo rates in India.
- Aviation stocks could be the big short from here on. Jet and Indigo show the potential to come down by at least 15-20% from current levels due to a mix of high crude oil prices and weak pricing power.
- FIIs were net sellers to the tune of Rs.(-526) crores while DFIs bought Rs.166 crore on Wednesday. A hawkish stance by the Fed is likely to leave the FPIs veering more towards risk-off trades by selling out of EMs.
- US stocks showed some recovery on the back of expectations that a hawkish view may be indicative of further growth pick-up in the US. EMs were a lot more cautious with the SGX Nifty already trading 20 basis points down.
- We have been pushing Kotak Bank and Yes Bank for quite some time and we do believe that both could have further upside potential of 15-20% from these levels as higher asset quality banks get positively re-rated.
- We have been talking about buying Aditya Birla Capital as an underpriced stock since Rs.154 levels. Even at 160, the stock does look attractive with a short term target of 190-195 in 1 month’s time frame.
- L&T could be the next big pick of the year after its sale of its E&A business to Schneider and a much bigger potential for its hydrocarbon infrastructure business. We expect the stock to veer towards the Rs.2000 mark during the year.
- A lot will predicate on the Fed guidance. A hawkish guidance will be negative for Indian markets in terms of flows.
