- The imminent trade deal, as affirmed by the US Trade Representative is likely to keep the markets excited on Tuesday. The Dow also scaled new highs even as Chinese data on growth and consumption also turned positive.
- The weak WPI inflation at 0.58% is an indication that pressure on pricing is still quite high in the manufacturing sector. The gap between WPI and CPI has now widened close to 500 bps, a sign of supply and demand stress.
- FPIs were net buyers to the tune of Rs.728 crore while DFIs sold Rs.796 crore on Monday. The pressure of FII selling has been quite high through the month and the net inflows continue to be negative for the month to date.
- Markets across the US and Europe were in positive with the FTSE up by over 2.25% pm early BREXIT resolution hopes. Asia has been mixed but SGX Nifty is trading in the positive in early trades on Tuesday.
- Coal India at Rs.196 could be the surprise package for long term investors. The company still offers solid profits and dividend yield and could be a divestment gainer over a period of time. Buy for target of Rs.230 in one quarter.
- We remain cautious on ITC notwithstanding the upgrades and expect the stock to drift lower towards the Rs.215 levels over the next 1 month as the GST Council is likely to once fall back upon on cigarettes to give a boost to GST revenues.
- Bandhan Bank, with its strong presence in the North East and the East is likely to be most affected by the ongoing strife over CAB. One can trade the stock on the downside for targets of Rs.450. The stock is likely to remain under pressure.
- Keep an eye on PSU banks for the action as the Essar / Arcelor deal is likely to address a lot of pending issues with the NCLT process.
