- Heavyweights like RIL, HUVR and TCS corrected on Tuesday resulting in the Sensex losing nearly 600 points in a span of 2 days. Apart from earnings concerns, there are also broader concerns in terms of global flows.
- The IMF downgrade of India growth to 4.8% has surely turned sentiments in the market to negative. This is likely to weigh on consumer stocks and also on capital goods stocks, which are closely linked to growth rates.
- FPIs were net sellers to the tune of Rs.50 crore while DFIs sold Rs.308 crore on Tuesday. FIIs have consistently been selling in the debt markets due to fears over higher inflation and negative real rates.
- Global markets were mixed with the fears of the Chinese corona virus taking a negative toll on many of the Asian markets. In India, the undertone has turned positive after 2 consecutive days of correction in the markets.
- We stay positive on Berger Paints and suggest a second entry in the stock at around Rs.560-565 range for targets of Rs.625 in one quarter. We see Berger benefiting from a bigger focus on home solutions rather a commodity approach.
- Smart investors can look to accumulate Kotak Bank at lower prices levels around the Rs.1600 mark with targets of Rs.1800 in one quarter. While the gross NPAs have certainly expanded, the NIMs have sharply improved, which is good news.
- ICICI Bank looks richly priced ahead of its results. One can look to sell out of ICICI Bank at around 535-540 range for downside targets of Rs.480 on the stock as it would struggle to justify valuations of 65 times earnings.
- We are not giving any fresh calls other than Kotak bank today due to uncertainty and will wait for markets to stabilize.
