Nipun Mehta, Founder & CEO, Blue Ocean Capital Advisors is of the view that market is currently consolidatng and it is possible for the Indian benchmark indices to see a 3-5 percent upmove or down move.
However, there are expectations of positive outcome from the monsoon session and the monsoons too so far have been good, which is giving a support to market from a domestic angle but global uncertainties still lurk in terms of volatility in currency and commodity markets, Brexit, highest rating downgrades in 2016 etc.
Dalal street ended flat today as markets entered a consolidation mode today. The Nifty held on to the 8,300 level while the Sensex closed 34 points in the green. The bank stocks outperformed and the Bank Nifty ended around half a percent in the green.
However, the midcaps which have been having a stellar run of late, had an off day and ended one-fifth of a percent in the red.
Although India looks like a bright spot, FII flows have not been strong, so for the immediate short-term earnings and monsoon session will remain key triggers.
Commenting on the likelihood of postponement of Tata Steel’s UK business, Mehta says sine the UK operations are a significant part of the company’s overall business, they are sure to create headwinds. If sold it would reduce the debt burden. So, until that happens the stock will remain range bound and every bit of news/rumour on the UK business will put pressure on the stock.
With regards to news of Lupin receiving an Establishment Inspection Report (EIR) from the US drug regulator which states that the inspection conducted in July 2015 at Lupin’s Goa facility has been closed and out of the 18 observations made in the Goa facility, nine observations have been given a clearance by US FDA. Mehta says, Indian pahrma companies are known to take corrective actions quickly and so the USFDA observations could be a temporary negative for few quarters.
It is likely that the space would come back into favour, says Mehta.For the entire discussion, watch video
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