- In an almost unprecedented move, the Nifty closed in positive territory for the 9th successive trading session. The Nifty has closed above the 10,550 mark although the odds appear to be stacked now in favour of a market correction
- The positive monsoon forecast by the IMD served to boost the sentiments around the FMCG stocks as Hindustan Unilever and Titan saw good traction. Other agri related companies like fertilizers and agrochemicals also performed well.
- FIIs were net sellers to the tune of Rs.(-951) crores while DFIs bought Rs.724 crore on Tuesday. The FPI selling appears to be a reaction to the global uncertainty while the domestic fund industry is still seeing robust retail inflows.
- There was a sharp positive market movement across the US and Europe, even as rest of Asia was slightly tepid. The SGX Nifty has already crossed the 10,600 mark in late trades and now looks set to face immediate resistance.
- We see the pressure around vulnerable banks like ICICI Bank and Axis Bank building up further. Use any rises to short these banks as we expect both these banks to correct by at least 20% from current levels.
- We continue to play positive on the FMCG sector, which we see as the Mona Lisa sector in the Indian context. Valuations will not matter and the consumption story will drive. Add on stocks like Hindustan Unilever, Britannia, Titan and Marico.
- We expect PSU banks with dodgy NPA transactions come under the bear assault. We saw that in the case of UCO Bank and now BOB could come under the bear hammer. Sell BOB for targets of 120-122 on the downside.
- Markets are rising on short covering but it is time to be cautious as markets may be getting too vulnerable.
