- Buying in pharmaceutical stocks and oil stocks led the Nifty higher on Tuesday. Reliance, ONGC and pharma stocks like Cipla were the major contributors to the Nifty up move on Tuesday.
- We believe that the value of the rupee will be critical and the ability to hold Rs.69/$ will determine the future direction of the flows into India. Market experts are already expecting to go beyond the 70 mark in this quarter.
- FIIs were net sellers to the tune of Rs.(-1043) crores while DFIs bought Rs.279 crore on Tuesday. FII selling has been sustaining during the month on expectations of a weaker rupee.
- Technology stocks on the NASDAQ corrected after being under pressure for some time due to rich valuations. Asia appears to be flat to weak and the SGX Nifty is also under pressure. Rupee may be the driving factor.
- There appears to be concerns across the board on tech valuations. Traders need to be cautious about stocks like TCS and Infosys which look fully priced. One can actually hedge Infosys with put options ahead of the results on July 13th.
- GAIL may be finally showing a turnaround with better pricing power and business outlook. We suggest buying GAIL at current prices with a 20% upside target in the next one quarter.
- With solid auto numbers for the month of June, we expect good traction on stocks like Maruti, M&M and Hero Moto. We expect 8-10% upside on all these stocks with a one quarter perspective.
- The INR is still vulnerable and that, along with crude oil prices, will continue to drive the stock markets in the near future.
