- In his testimony, Jerome Powell of the US Fed almost confirmed that there would be a 25 bps rate cut in the July 31st Fed policy announcement. That is likely to be a big positive for the global markets on Thursday.
- Even as the markets are up against another weekly F&O expiry, the overhang of the FPI tax still remains. The government now affirms that FPIs structured as trusts or AOPs will be subjected to higher rates of taxation.
- FIIs were net sellers to the tune of Rs.605 crore while DFIs bought Rs.667 crore on Wednesday. FPIs are continuing to sell over the last few days and the clarification on the FPI tax issue could actually lead to more aggressive selling by FPIs.
- Even as Europe remained under pressure, the US and Asian markets have reacted positively to the testimony given by Jerome Powell. The SGX Nifty is up by nearly 50 bps and that is likely to support the markets on Thursday.
- The Zee stake sale issue may still be largely overdone and they are going to find it hard to get buyers for the valuations they expect. At Rs.333, the stock still looks overpriced and one can look to sell the stock with targets of Rs.290.
- We suggest buying Bharat Electronics (BEL) as a solid play on the defence sector, where the government is looking to increasingly in-source. One can look to buy at round Rs.105 for targets of Rs.125 on the stock in one quarter.
- At lower levels of around Rs.650, one can look to buy Indiabulls Housing which is available at around 7.5X P/E Ratio. The stock is likely to appreciate to levels of Rs.720 in one month and one can look to trade accordingly.
- Cues are positive with the only worry for the Indian markets being the sharp rally in oil prices on Wednesday. Trade cautiously.
