After reaction, its time for some action now. The market appears to have made a hasty exit just as the RBI tone signaled the beginning of the end of easy monetary policy. A few surprisingly hawkish steps and comments unveiled in the RBI’s mid-year policy review set the cat among the pigeons. A hike in SLR, some tightening of lending norms and hike in inflation expectation sent a clear message that the soft corner shown during the economic upheaval will no longer be available. But, the market may have overreacted. What made the matters worse were persistent weakness in global markets and a couple of less enthusiastic numbers.
So, expect a bounce back though the start may still be a nervous one due to mixed external trend. RIL will announce its results tomorrow and numbers could match expectations as there is usually some treasury gain to bank on. With F&O expiry just a day away, further short covering could set in. Nifty Nov futures managed to end at a slight premium to the spot Nifty price
We are of the opinion that the markets were ripe for correction and RBI meeting was just an excuse. Realty was a major loser as funds dumped the stocks in this sector. We advice investors to get rid of the stocks in this sector if there is a bounce back. Metals and Banking were also week and were among the major losers yesterday. Sesa Goa was down 12 percent and was a major loser on rumors that the the company is subjected to enquiry by Serious Fraud Investigation Unit. The company denied the rumors later. However,the stock is priced to perfection and should be avoilded now.
Think Soft Global is one stock that defied the market direction and managed to close up by 20 percent and was traders favorite on Tuesday. We see the stock gaining intial hours and provides a good short selling opportunities, if it goes above Rs 225. We see the market gaining in the first hour of trade providing good opportunity for the weak hearted to exit.PTC India, prime Securities, Fedders Lloyd and Zensar Technologies are some of the stocks to watch out in today's trade.