- After touching a high of 39,270 during the day, the Sensex gave up 400 points from the peak to close well below the 39,000 marks. Uncertainty ahead of the monetary policy also spooked the markets a good deal.
- The cracks were the widest in the downstream oil companies which were spooked by the sharply higher prices of crude. We have been talking about the weakness in Zee and the stock closed near 400. Prepare for further downsides on the stock.
- FIIs were net sellers to the tune of Rs. (-1041) crores while DFIs sold Rs. (-81) crore on Wednesday. Today was the first time in a long time that we saw net selling by FPIs even as domestic players have been consistent sellers for quite some time!
- Market strength was visible across the US and Europe with Germany showing sharp appreciation as the BREXIT deadline approaches. The SGX Nifty is also quoting in positive territory and is likely to make another attempt at 11,800.
- With a new CEO in place and the worst bottoming over for auto stocks, one can look at Eicher Motors closely. At around Rs.20,500, the stock does offer good value with an upside target of nearly Rs.24,500 in the next quarter.
- Despite the SKYMET estimates, we remain positive on agri and consumer stocks. In the last few years, the IMD has been correct more often than not and IMD still holds a positive view on the monsoons. Stay long on UPL and Rallis.
- We expect that the RBI may delay rate cuts and instead focus more on liquidity. This could come as a temporary disappointment for the markets and that would be negative for the rate sensitives. Traders need to prepare for the possibility.
- We should await the credit policy announcement at 11.45 before attempting any serious trades in the market tomorrow.
