- Over the weekend the positive results of RIL and HDFC Bank are likely to keep the sentiments of the market buoyant on Monday. Markets may see bouts of volatility being the monthly expiry week for futures & options contracts.
- The Jet Airways resolution continues to remain an overhang on the markets. However, it looks like the airline may get sold piecemeal and most employees may get placed. Banks may have to take a cut of up to 70% or more on loans.
- FIIs were net buyers to the tune of Rs.1039 crores while DFIs sold Rs. (-338) crore on Thursday. FII buying is likely to continue as markets return after a day of break before going into a long weekend. FII buying in April crossed Rs.13,000 crore.
- Global markets were flat to positive on Friday and that includes Europe and Asia too. SGX Nifty is marginally in the positive but we may have to await cues as Nifty returns for trading after a truncated way of just 3 trading days.
- Our top two picks for the day include RIL and HDFC Bank from a trading perspective. We see 8-10% upsides in both the stocks in the next 1 month and one can look at these stocks on the back of solid results.
- As Jet could sink deeper in the markets on Monday, one needs to go short on most vulnerable stocks with vulnerable commitments. This includes stocks like Zee Entertainment, DHFL and Repco Housing. All could come under pressure.
- Out top pick in the banking, space remains Axis Bank as a medium-term value pick assuming that its deal with Met Life goes through. It should add profitable bancassurance avenue to the bank and enhance valuations.
- We expect the positive results from HDFC Bank and RIL over the weekend to buoy the markets. Expect the Nifty to get closer to 12,000 in the next target round.
