• The Nifty recovery on Thursday was driven by IT stocks like IT and Infosys and the INR weakened and the benefits directly flowed to the IT companies. However the US-Korea standoff is likely to make matters worse for Indian markets.
  • The government proposal to levy a special cess on upstream companies changes the entire economies of the game. Their gains from higher oil prices are likely to be entirely wiped out by this move. Wary on upstream, bullish on downstream.
  • FIIs were net sellers to the tune of Rs.(-702) crores while DFIs bought Rs.1481 crore on Thursday. HSBC has already warned of a sharpening of FII outflows in the coming months in tune with the rest of EMs.
  • Markets across the world are slightly uncertain with the talks between the US and North Korea breaking down. SGX is likely to be cautious and under pressure with macros doubtful in the short term and the medium term.
  • Aditya Birla Capital has come down in the recent past from around 150 levels to 140 levels. At these levels, the worst may be factored in and we could see the stock bounce back to the 190-200 levels in the next couple of months.
  • We continue to stay positive on Tata Motors post the results. The sharp fall in profits was more due to the one-time hit of Rs.1640 crore. The stock at around 310 offers limited downside and an upside target of Rs.400 in the short term.
  • Among the technology stocks, Tech Mahindra may be best poised to capitalize on the weaker rupee. Despite the rally in the last one year, we like the stock at around Rs.700 with targets of Rs.800-820 in 1 quarter.
  • We are not changing our recommendations for the day. We also suggest staying hedged on your equity portfolios.

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