Consistent Rupee depreciation takes a toll on Indian Markets - Microsec

Indian market is likely to continue its volatile run on the consistent depreciation of INR owing to the demand from the oil importers. The food security bill also induce some volatility in the market by way of apprehension regarding incremental twin deficits. We expect the INR to get stable and hence equities may also remain stable with less volatility and a gradual rally in market led by Banking & Finance.

Banking stocks have fallen due to deteriorating economic conditions which has raised NPA expectations and also due to falling INR vs. USD. Whereas the economic fundamentals are unlikely to smoothen soon, better monsoon and a stable INR going forward may arrest some of the damage in banking space.

The rising Brent crude oil prices also adding to the injury raising the concerns over increasing CAD. Also we have Q1 GDP data & F&O settlement scheduled during the week.

SBI, Syndicate Bank, IDBI, Allahabad Bank may rally 8-10% in 1-3 months. Rallis India, Britannia Ind., Dabur, Swaraj eng., LICHF is good bet for a medium term investment.

Source : Equity Bulls

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