Market succumbed to selling pressure on Thursday on the back of weak global markets.
Sharp selling in Indian markets was mainly led by deep cuts in the technology and metal sectors, which were down more than 5%.
Although Nifty and Bank Nifty still have failed to violate their March 2022 lows, but broader market has seen significant lows and has been going through a sharp portfolio reallocation from technology, metals, and commodities towards financials, FMCG and Auto.
We see a major ‘Bullish Double Bottom’ formation in Bank Nifty around 32500 levels and should lead to the next leg of rally towards a potential target of 45000.
Meanwhile, the SGX Nifty is suggesting a gap up opening of 200 points after PBOC cut policy loan rates and pledged more easing to stabilize the economy. Asian markets are trading in the green.
Bank Nifty & Ratio of Bank Nifty to Nifty 50 Index
Stocks to watch
Positive Read through
- Indonesia has decided to lift its ban on palm oil exports effective 23rd May- positive for FMCG sector shares.
- Glenmark gets USFDA approval for generic of Janssen’s Zytiga
- Dr. Reddy’s launches to offset US price erosion, India may grow in double digits.
- Ashok Leyland earnings above street estimates, commentary positive.
Negative Read Through
- HPCL- inventory gains help margin, profit, and marketing losses may widen in Q1
- Godrej Consumer- weakness in Indonesia hurts overall business, domestic volumes decline 3 pct
- Concor- earnings mildly below expectations, revenue up 5 pct YoY
- Lupin- price erosion currently in double digits, US sales expected to be soft in Q1
- Gland Pharma- revenue up 24 pct YoY, margin guidance at 35-37 pct
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