- Hopes of a cut in capital gains tax on equities and expectations of a review of the dividend distribution tax spurred the stock market higher as the Sensex gained nearly 800 points in a span of just 2 trading sessions since Muhurat trading.
- Steel companies were buoyed by the government indication that the rules for captive mines usage could be relaxed permitting companies to sell iron ore to group joint ventures also.
- FPIs were net buyers to the tune of Rs.877 crore while DFIs bought Rs.145 crore on Tuesday. FPIs have infused close to Rs.4700 crore into equities this far during the month of October with two trading sessions to go.
- Global markets came under pressure across the US and Europe after there were hints of a delay in the trade deal between the US and China. Johnson winning the vote for fresh elections in UK on December 12 will also add to volatility.
- Watch out for Tata Steel which could have a 20% upside from current levels. Apart from the upside from the liberalization of the captive mining lease policy, steel could also be a big gainer from the China stimulus that is expected soon.
- We retain our short call on Zee Entertainment and suggest selling in the range of Rs.240 to Rs.250 for downside targets of Rs. 210 and 195 in the next couple of weeks. We expect selling pressure to pick up in Zee group stocks.
- We reiterate out buy call on Infosys at around the Rs.660 levels for targets of Rs.720 and 750 in the next one month. The worst may be factored into the stock in terms o frisk and the class action suit may have limited relevance for risk.
- Markets are likely to face resistance at the Nifty level of 11,900 after the sharp short covering rally post the Muhurat trading day.
