- The Nifty settled at 10,325 levels after the credit policy announced a fairly dovish inflation and rate outlook as well as a robust growth outlook. However, the global trade outlook is still hazy with China threatening to retaliate on tariffs.
- While the RBI has stayed dovish on rates, the monsoon and the Kharif pricing could have a key role to play in inflation. Also watch out for global crude oil which is a big contributor to inflation in India. They could be short term risks to market.
- FIIs were net sellers to the tune of Rs.(-108) crores while DFIs bought Rs.615 crore on Thursday. Apparently, the institutional enthusiasm is still not very high and that could be the worry at higher levels.
- Most of the European markets were up by over 2.5% on Thursday after it emerged that the US trade war could actually open up a huge opportunity for the EU and UK in terms of dealing with China and the rest of Asia. SGX is flat in trades.
- The rally on Thursday was largely on the back of the dovish credit policy but that may be misleading. Don’t read too much into the impact on financials. Stay short on stocks like ICICI Bank and Axis Bank and add on to put positions.
- Cadilla Healthcare could be an interesting pick at around the level of 390 with a target of Rs.460 in 1 month time. Apart from earnings visibility, the stock is also less vulnerable to the vagaries of the US FDA pronouncements.
- The focus now should be on non-cyclical stocks with strong brands to fall back upon. Some buying ideas could include Tata Global Beverages, Britannia and Titan which have a strong brand franchise in these tough markets.
- The market rally after the policy is most likely a fake rally and designed to fool you. Undertone is still weak and you must use rises to short this market.
