- The sharp crack in the Nifty and the Sensex was accentuated by the Chinese announcement of retaliatory tariffs on over 106 items of US imports to the tune 25%. Markets across the globe went into panic mode.
- The markets are likely to be wary tomorrow ahead of the Monetary Policy announcement around mid-day. While a status quo almost looks certain, the markets will be gauging the language on inflation and rates.
- FIIs were net sellers to the tune of Rs.(-335) crores while DFIs bought Rs.153 crore on Wednesday. Institutions have been a little wary of Indian markets in the light of the global trade wars and the uncertainty over monetary trajectory.
- Markets across Asia succumbed to the trade war fears even as US stocks managed to hold flat as did Europe. The mood may be less frantic tomorrow as evidence by the 1% upside shown by the SGX Nifty.
- Tata Chemicals has been a stable mover and a lot of its future efficiencies are yet to be factored into the price. With the recent 10% correction in the stock one can buy around 710 for targets of 800 on Tata Chemicals
- We suggest short positions in PSU banks, vulnerable private banks like ICICI Bank and Axis Bank as well as metals which are likely to be the most likely losers if the trade war was to escalate. Short on ICICI Bank, Axis, Tata Steel and Hindalco.
- The focus now should be on non-cyclical stocks with strong brands to fall back upon. Some buying ideas could include Tata Global Beverages, Britannia and Titan which have a strong brand franchise in these tough markets.
- Trade cautiously ahead of the monetary policy as any hawkish tone from the RBI could spook markets substantially.
