InvestorQ : How do you see the stock markets performing on Tuesday 05th April, and will the HDFC driven rally sustain for more time?
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How do you see the stock markets performing on Tuesday 05th April, and will the HDFC driven rally sustain for more time?

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diksha shah answered.
1 month ago
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The pivotal news flow on Monday was the mega merger between HDFC Ltd and HDFC Bank. As the synergies of the deal became clear, both the heavyweights gained close to 10% after being nearly 15% higher at one point of time. HDFC will cease to exist as a separate listed entity post-merger and this deal will be business accretive for HDFC Bank.

In terms of the structural details of the market, the breadth of Nifty was positive with A/D ratio at 46:4. In addition, the VIX tapered further to the 17.91 levels making case for buy on dips in the market. The uncertainty of war and oil may not be out of the way but for now the markets are all about celebrating the mega HDFC deal.

Foreign investors net bought equities to the tune of Rs.1,152 crore even as the domestic funds and LIC bought stocks worth Rs.1,675 crore on Monday. In global markets, the Dow was up 104 points and NASDAQ up 271 points. Europe was 50 bps higher on Monday while SGX Nifty is trading 52 bps with gains in early trades.

However, here is playing devil’s advocate. The buoyancy on Monday was on the back of the HDFC merger deal. Now, the immediate uncertainty is over the RBI policy and the Fed minutes during the current week. Traders must be cautious as a very hawkish tone of the policy might put the brakes on the rally. It is best to take a call post the RBI policy.

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