Goldman Sachs remains strategically positive on India

Timothy Moe, Goldman Sachs says the brokerage remains strategically positive on India, but thinks it makes sense to hedge potential downside around the Budget, especially since the current results season has been soft.

“We suggest short-dated put-spreads on the India banking sector, on which our India financials analyst has recently expressed caution, as a way of doing so. Overall, we find investors concerned about India. Stocks well positioned for a dividend increase include ITC, HCL Technologies and Tech Mahindra,” Moe adds.

Meanwhile, on the global front, Michael Gavin of Barclays says the standoff between Greece and the Eurogroup persisted Tuesday, although reports suggested that Greece may be preparing a request to extend its loan agreement.

“The ECB is likely to provide ELA to the Greek banks as long as there is a chance that an agreement will be found. However, if the Greek authorities do not take up the Eurogroup's offer this week, ELA would likely be shut down. This would likely precipitate the need to set up capital controls to avoid capital flight out of Greece, and Greek banks would likely have to introduce limits on cash withdrawals,” Gavin adds.

According to him, in this event, the Greek government could also quickly run out of cash and be forced to run arrears, keeping exit risk for Greece elevated.