- The INR weakened by 52 paisa to Rs.66.90/$ and that led to the Nifty falling sharply in later trades. Importers and banks rushed to cover and banking stocks were hit quite sharply in Wednesday trades.
- As we had said in the morning note, the pressure on aluminium stocks continued. We expect more downsides on these aluminium stocks as prices adjust to the softening of sanctions on Rusal by the US.
- FIIs were net sellers to the tune of Rs.(-305) crores while DFIs bought Rs.436 crore on Wednesday. We expect further pressure on the FII flows as the rupee weakness should put further pressure on dollar adjusted returns for FPIs.
- Dow was actually in positive territory as the US markets adjusted to the 3% benchmark yields. Asia is in the negative but the SGX Nifty is almost flat in early trades. A lot will depend on how the INR pans out today.
- Axis Bank is likely to be in the limelight over the results announcement on Thursday. The street is expecting a 50% fall in profits but the key will be NPAs and spillages. Use higher levels to sell the stock again.
- India’s second highest FPI outflows of $660 million should be sentimental dampener for the stocks. Expect some short covering in telecom and metal stocks considering that it is F&O expiry today.
- With Oil at $74.5/bbl in the Brent Market, we like Oil India around the Rs.234 levels for targets of Rs.285 in one quarter. It is still quoting at around the price equivalent of oil prices at $63/bbl, making room for upwards re-rating.
- The market volatility for the day will be determined by the F&O expiry. Rolls are smooth and no disruptions are expected in the market.
