- The correction continued for the fourth successive session even as traders are expecting some short covering on Thursday being the F&O expiry day. There could be some covering in sectors like pharma and metals.
- Even as the US markets showed a bounce, most of Asia has been cautious due to the rapid spread of the Coronavirus. While short covering could hold up Indian markets on Thursday, the pressure will be visible on Friday again.
- FPIs were net sellers to the tune of Rs.3337crore while DFIs bought Rs.2786 crore on Wednesday. FIIs have now sold close to Rs.7000 crore of equities this week and that negatives nearly 70% of the inflows for the month of February 2020.
- The US and Europe showed some bounce from lower levels but most of Asia remained under pressure on Wednesday. Asia has opened weak on Thursday and the SGX Nifty is also lower by 50 bps. F&O expiry could be the key event risk.
- One can look to accumulate SBI ahead of the SBI Cards IPO at a price range of Rs.325 for short term targets of Rs.350. The SOTP valuations of SBI are likely to favour the stock as SBI Cards starts off with a valuation of Rs.70,000 crore.
- With stocks like L&T and Hindalco hitting new 52-week lows on Wednesday, one can look forward for further downsides on these stocks. Play both the stocks on the lower side for downside targets of 10% from current levels.
- For those investors looking at a good retail play, you can look to buy Spencer Retail that just got hived off from CESC. The stock makes a good buy at Rs.108 and one can target upside levels of Rs.135-140 in one quarter on the stock.
- With Asia weak, we could see early weakness in Indian markets. However, short covering could keep the fall in check on Thursday being F&O expiry.
