- Even as the market had a bad F&O closing this month, the Friday trading should start on a positive note. China has hinted at a likely rapprochement over trade talks and the US has shown good consumption growth despite weak GDP.
- Another big positive for the market on Friday should be that the August 30th deadline for unwinding partly paid positions worth Rs.30,000 crore has been extended to September 30th. That should give more time for ordering exit.
- FPIs were net sellers to the tune of Rs.987 crore while DFIs bought Rs.489 crore on Thursday. However, the unwinding in futures was quite sharp in banks and metals and that kept the sectors subdued on Thursday.
- There is high level of optimism in US and European markets on positive cues from China, the US and also from Italy. The SGX Nifty is in the negative but that could turn around on Friday on the back of positive global cues.
- Vulnerable banks like RBL Bank and Yes Bank could be under pressure due to larger asset quality issues. Both stocks appear to have further downsides especially after the recent junk rating assigned to Yes Bank by Moody’s.
- We continue to be positive on select and niche players in the FMCG space and like stocks like Britannia and Nestle despite the relatively rich valuations. We see 20% upside in these stocks in the next 6 months.
- Downstream oil is likely to benefit from improved refining margins and also from the likely recovery of capital BS-VI costs from diesel and petrol prices. Buy BPCL at Rs.350 for targets of Rs.390 in one month time frame.
- We are just adding one fresh call considering the weekend coming up and further trading holidays in the coming week. Trade cautiously.
