- The sharp crack by 0.75% on the Nifty was largely driven by pharma and banking stocks. But the real cuts were seen in the mid cap stocks with over 200 stocks touching their 52-week low levels.
- Markets are likely to continue to be weak ahead of negative data flows on CPI inflation, IIP growth, WPI inflation and trade deficit at $16.6 billion. All these factors put together could also put pressure on the INR.
- FIIs were net sellers to the tune of Rs.(-626) crores while DFIs sold Rs.(-71) crore on Monday. FII selling on the debt front is a lot sharper as the worries of rate differential are beginning to haunt global investors.
- Most of Asia has been under pressure on expectations that the Chinese Yuan could correct much more sharply from current levels. SGX Nifty is also under pressure and that pressure is likely to continue on the back of weak macro data.
- Tech Mahindra remains the one technology stock that is still available at reasonable valuation. The sector is seeing traction due to weaker rupee and the BFSI revival of TCS should also be positive for the stock. Target Rs.750.
- We believe that after the stellar results Hindustan Unilever may be re-rated for much higher levels of growth and also valuation re-rating. With sales growth on track, the company could target to cross the 2000 mark in one quarter.
- Marico at Rs.350 may be close to its yearly highs but the impact of lower copra prices is yet to be priced into the stock. We have a conservative target of Rs.425 on the stock in the next one quarter.
- Too many macro data points have been negative and that is not great news for banks. Focus more on the consumption and export sector.
