- An innocuous statement by a top Parle Products official let the cat out of the bag on the consumption slowdown. Markets reacted in panic to Parle’s statement that it was planning to retrench nearly 10,000 of its staff due to slowdown.
- Tata Motors came under pressure due to the sharp downgrade and is likely to be under pressure. We are withdrawing our long trade on Tata Motors due to the heightened uncertainty in the short to medium term.
- FPIs were net sellers to the tune of Rs.771 crore while DFIs bought Rs.354 crore on Wednesday. After a day of buying the FPIs were back into selling mode and the domestic consumption squeeze is likely to keep them on tenterhooks
- The US and European markets were in the positive on Wednesday gaining nearly 1% even as Asia continues to be mixed. The SGX Nifty is also under pressure and it is likely to be driven more by domestic consumption issues.
- We remain positive on Infosys despite the recent rally and suggest buying the stock in the range of Rs.790 to Rs.800 with an upside target of Rs.880 in the next one quarter. It is expected to outperform the IT sector overall.
- Coal India has corrected sharply in the last few months and is now available at a P/E of just about 11. Also the dividend yield is nearly 8% and that gives sufficient scope for the stock to enhance value. Buy with target of Rs.225 in one quarter.
- For long term buyers, this may be a good opportunity to buy Biocon at the current price of Rs.217. With its biological business still doing very well and a contract research business to boot, one can target Rs.300 in 6 months on the stock.
- More than global cues, the India story is likely to be largely driven by the domestic consumption squeeze. That must be the focus of traders.
