SBI made smart gains

  • Nifty closed at an all time high level of 11,387 even as select banks like ICICI Bank, Axis Bank and SBI made smart gains during the day. Banks have recovered the losses of Thursday and more in the last couple of trading sessions.
  • After a sharp bounce from banking stocks, Tuesday saw metal stocks like Tata Steel and Hindalco driving the index higher. A lot will finally predicate on Chinese demand, which shows a slip into current account deficit.
  • FIIs were net buyers to the tune of Rs.315 crores while DFIs sold Rs.(-320) crore on Tuesday. Domestic funds have been seeing lower inflows at higher Nifty levels and that may start weigh on the MF daily investment patterns.
  • Markets across the US and Europe have been quite strong on expectations that the trade war may come to an end. In Europe the consensus is building up that the BREXIT may not be really that disruptive and may be smoothened.
  • China reporting a current account deficit for the first half is good news for the metal companies which are relying on robust imports from China to support their demand. Expect upsides on stocks like Hindalco, Vedanta and Tata Steel.
  • With the HDFC AMC listing today, which is likely at a premium, one can look to buying Reliance AMC, which is quoting at half the valuations of HDFC AMC. It may offer a more reasonable value at Rs.267 with targets of Rs.300.
  • With the UPL funding of Arysta almost being closed out, it looks a good bet to buy around the Rs.645 levels for short term targets of Rs.750. One can target upside on the stock within the next 1-2 months.
  • The Nifty may not consolidate above the 11,200 mark for now and traders can focus on the range of 11,200 to 11,500 for the month..

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