- After a consistent fall in the Nifty over the last few days, the Nifty and the Sensex almost recovered all the losses of 2019 in a single day on hopes that the Chinese stimulus would turn out to be a big positive for the stock markets.
- With the CPI inflation coming in sharply lower at 2.19%, it has again raised hopes of a rate cut by the RBI in February or at least a shift to a dovish viewpoint by the MPC. Focus on rate sensitives like financials and real estate stocks.
- FIIs were net buyers to the tune of Rs.160 crores while DFIs bought Rs.417 crore on Tuesday. It remains to be seen how the FPIs react to the China stimulus, which is likely to compensate for the growth shock from slowing Chinese trade.
- While the US markets recorded a smart bounce on the back of the Chinese stimulus package, most of Asia has been lackluster. The immediate concern appears to be on the Yuan front and the impact on EM currencies.
- We continue to be negative on IndusInd Bank and we have been selling the stock from Rs.1550 onwards. We see the stock getting closer to the Rs.1300 mark as the corporate governance issues continue to hover.
- We reiterate our Buy call on SBI and we expect this quarter to be the second consecutive quarter of positive surprise. Lower yields, credit off-take push as well as the bottoming of the NPA cycle set a target of Rs.350 for SBI this quarter.
- With a series of upgrades and December quarter again likely to be positive for its retail and Jio business, we have a positive trade on RIL at the current price of Rs.1130 with an upside target of Rs.1250 in one quarter.
- Markets will be determined by Asian cues. Lower trade deficit at $13 billion will prove to be a big positive for the markets.
