- On a day when the Nikkei cracked by over 3%, the Nifty and the Sensex also felt the pain as the fears of a global economic slowdown came back to haunt the markets. There was selling across the board, especially in financials.
- The big story globally has now moved away from oil and dollar to the global economic slowdown. China and the US are likely to take a steep hit on growth and that is likely to pull down global GDP growth by nearly 40 bps.
- FIIs were net buyers to the tune of Rs.150 crores while DFIs sold Rs. (-12) crore on Monday. This marks a sharp slowdown in FPI flows after a long time and could be a sign of things to come with valuations having scaled up.
- While the US markets were flat on Monday, Asia has shown a sharp recovery after the sharp correction on Monday. SGX Nifty is directionless in early trades and there could be some bounce after Sensex lost 600 points in 2 sessions.
- We expect banks and autos to continue to remain under pressure on Tuesday. Auto top line numbers appear to be under pressure. Negative on Maruti, Eicher Motors, ICICI Bank, IndusInd Bank. Play with short futures or put options.
- We have been warning about pressure on the Zee TV stock for quite some time. It is the ideal stock to short on every bounce and we eventually see the group debt push the stock closer to the Rs.350 levels. Trade accordingly.
- Sun TV could be a good buy on the media front. Apart from the leadership position that they have among the South Indian population, it is also likely to benefit from the increased prospects of the DMK in the regional elections.
- We could expect a bounce on Tuesday in the markets but any higher levels could see selling pressure on banks and autos. Play accordingly.
