The Repo Rate Hike: Inflation Gave the Cover, the Rupee Gave the Reason

Tit - bits

The US Stocks soared on Tuesday post the

PCJ showroom in Varanasi 

market's biggest sell-off in more than three months, as investors grapple with lingering fears over a possible coronavirus epidemic. 

Dow Jones Industrial Average jumped 187.05 points, or 0.7%, to 28,722.85, snapping a five-day losing streak. The S&P 500 climbed 1% to 3,276.24 while the Nasdaq Composite advanced 1.4% to 9,269.68. At its peak of the day, the Dow was up more than 280 points. 

I had mentioned in my earlier post that it would be humorous to think that markets will go for a prolonged bouts of selling,  following the news of coronavirus outbreak. 

Most of the major European markets also closed in the green yesterday. Today,  Nifty is expected a gap up opening of at least 20 points. 

#Those who have bought the shares of P C

Photo: Live Mint

Jewelers Ltd (Rs.22.85), the 2nd largest listed Jewelry company in India, should continue to do the same. I'm of the opinion that the FM,  Nirmala Sitaraman would go for some cuts in the gold import duty, to boost up the gems and jewellery sector. 
2019 was also a difficult year for real estate and stock markets, and some jewellers believe this could see gold jewellery, in particular, emerge as a favourable investment option in 2020. 

Despite what the coming Union Budget may hold for the Gems and Jewellery sector, the volume growth for players is expected to increase on the back of reintroduction of low-cost gold metal loans and likely stabilisation of gold prices at lower levels. 
Gold jewellery exports grew 21% from November 2018 to November 2019, according to Gem & Jewellery Export Promotion Council (GJEPC) data.

Moreover, the price rise in gold has already increase the inventory valuations of the company. The stock of P C Jewelers Ltd is available at dirt cheap price. 

#Those who have bought the shares of BHEL (Rs.43.30) at around Rs.45 and have not exited at the stop loss has nothing much to worry, because with the rise in rural income the capital goods sector,  will soon pick up steam. Moreover,  the NDA government is contemplating to sell the stake of this company through strategic partner route,  instead of plain vanilla way of getting things done through stock exchanges. This is expected to give better valuations of the shares of Bharat Heavy Electricals Ltd (BHEL). 
The government is expected to push up the number of MSMEs in India on a sustainable basis through various schemes and programmes. Further, to combat the slowdown and to boost demand for local products, import substitution and a strong focus on exports are likely to pave the way ahead.

Keep adding the shares of BHEL on declines with price targets of Rs.71/77.

#The scrip of Ujjivan Financial Services Ltd was recommended on last Friday at Rs.368, T: Rs.380  - 402, SL: Rs.355.90. The stock rose to Rs.379, yesterday,  where Premium Members and also my brokerage clients were asked for profit booking. 

#Those Who are still holding the shares of Wockhardt Ltd (Rs.343.85) from Rs.237 and Rs.249, where it was recommended, should keep SL at Rs.335 and keep holding for targets of Rs.366/371.