- As the year comes to an end, the trading volumes are likely to be thinner on Monday and Tuesday as domestic and international financial institutions just look to consolidate on their large cap performance of the year.
- The trade deal will be the big news for the coming week and one can keep an eye on the progress on the trade talks. Even signs of a deal between the US and China in the first half of January will be seen positively.
- FPIs were net buyers to the tune of Rs.81 crore while DFIs bought Rs.126 crore on Friday. Year end lethargy appears to have set into institutional flows as the main intent now is not to lose out on the large cap momentum of the year.
- It is hardly surprising that most of the markets across the US, UK, Europe and Asia have been largely lacklustre. The SGX Nifty is also marginally in the negative but it could be more out of year tepid volumes than anything else.
- We had suggested exiting RIL for the short term around 1560 levels due to the issues pertaining to the sale of its refining business stake to Aramco. We expect the pressure to continue and don’t recommend buying till Rs.1400 levels.
- We like software stocks like Infosys and Tech Mahindra for this week as the expected rise in the current account deficit is likely to make the rupee weaker and benefit IT stocks. One can look to trade for 10-15% upsides from current levels.
- We are reiterating our call on NMDC as the best play on metals and minerals in India with the potential to grow sharply once the trade deal takes shape and the China stimulus commences. We target Rs.160 on NMDC by March 2020.
- The odds are in favour of a lacklustre last two days of trading but global cues on the trade front could hold the key.
