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RBI Policy Comments of Mr. Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities

Dec 02, 2014   17:22 IST 
India

Impact of RBI Policy on Stock Markets

RBI maintained status quo in line with expectation of bankers. Markets after RBI policy were seen flat due to no rate cut. RBI looked slightly dovish note on its inflation outlook quoting "activity is likely to be muted" in the current quarter and lowering its inflation target to 6 percent from 8 percent for March 2015 indicating markets to be positive till that period and Nifty could be seen making new highs. With easing of inflation rates, rate cut could be soon expected giving boost to economy and helping markets to rise, though global risks prevail. While US Fed may go for policy normalization next year, volatility is set to increase.

 

Top 5 stocks to watch out for after RBI Policy

 

IndusInd Bank:

IndusInd Bank – The stock has run up around 10% in previous session on back of rate cut expectations. The bank has significant portfolio exposure to commercial vehicle sector. Now as anticipations are building for a extension in excise duty in auto sector, positive bias can be maintained on the stock with a further up move expected of 15% over next six months. Also, with RBI dovish tone today and possibility rate cut cycle on the cards can give boost to Indusind.

Purvankara Projects Ltd:

Purvankara is seen gaining momentum .Technically the stock is showing signs of correction and presents opportunity to accumulate in range of Rs.85-90, with 80 seen as bottom. The co has recently inked an JV to develop land in Pune. Easing in FDI norms may also help the sector along with rate cut anticipated in February. Currently the stock is trading at Rs.90 and is expected to test 100 in next 6-8 months.

 

Apollo Tyres:

Apollo Tyres: Stock saw some correction in past few sessions and have bounced back taking support at 215 levels. Companies Q2 profits were seen up by 10.5%, Shares are expected to touch new highs of 250. With increase in sale of auto and growth in the sector, auto ancillary stocks are expected to make new highs. As RBI maintained status quo the rise could be slow. The stock could be bought at current level for a target of 250-255.

Tata Motors:

With RBI maintaining status quo on rates, Tata Motors sales may not any significant boost. The downside of the stock is however expected to remain limited and it could take strong support at levels of 500. The stock could be bought around those levels for a target of 600 for a holding period of around 4-5 months

ICICI Bank:

Though RBI did not cut rates which would have boosted the stock price of this bank significantly; RBI indicated that it would cut rates depending on Inflation levels early next year.  ICICI Bank is expected to from flat to weak in the near term but could be a long term bet as rate cut nears. This stock could be bough on dips for a target of 1900-1950


 
 
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