- Wealth PMS (50L+)
I’ve only reported bearish views for a while and I may be completely off the rocker here. But I think what I’ve said will unravel over time and certain news will continue to flow in as we go along. Let me classify news like so:
No Oil Price Hike
The oil ministry has decided to postpone the oil price hike, citing trouble to the “common man”. Under-recoveries stay high at PSU oil companies, which obviously means stay away from HPCL, BPCL and IOC. On the other hand, how much more can they fall?
Another bullish part of this is: If oil prices aren’t being raised, and inflation is below 3%, we could see interest rates being reduced. This is a huge trigger for banks and auto, which will see a run in the stocks – late today, many banks moved fast into the positive zone. Watch Axis bank, ICICI Bank and HDFC Bank. Also watch Hero Honda and Maruti.
September Industrial and Infra Growth – lower than expected.
It seems that industrial and infrastructure growth in September was muted compared to last year. Not good, but no cause for worry – wait a couple months at least before you make a decision. July was low, but August was high again, so this may just be an aberration.
Sensex will list in the US
So the BSE plans to list Sensex futures in the US Futures Exchange (Chicago). This is not a big deal, as Nifty futures have been listed in SGX (Singapore) for a while, but as you can see, volumes are abysmal. Only the near month contract was traded today and that too, just 507 contracts. Any hedge fund that was feeling deprived of a PN could jump on to this, but I think they want the real thing.
Disclosure: Short the Nifty, Long RIL.