Bull market on the anvil, rupee headed for 45/dollar: Sanjeev Bhasin

Indian stock markets are likely to rebound as the Federal Reserve action on Thursday gets discounted. US markets moved up as improving manufacturing data overshadowed rate hike concerns.

Today is the Spring Equinox, which indicates a change in trend & the way forward for the next three months.

We could see a new "bull market" in India over the next three months because of a) Improvement in fundamentals of the economy on the back of lower inflation, uptick in manufacturing & better earning revision from corporates; b) Expectation of positive electoral change which could turn the rupee headwind into a strong tailwind with targets of 45 to the dollar; c) Outperformance in the emerging market basket led by unabated foreign buying.

Expect weekly close above 6,500 on the Nifty today with cyclicals leading the rally. Long banks, metals, capital goods & short on IT and oil marketing companies should be the trade for today.

Trading calls for today:

Longs:

1. Buy ICICI Bank: 1200, stop loss 1180, target 1250

2. Buy Petronet: 133, stop loss 128, target 150

3. Buy Siemens: 682, stop loss 670, target 720

4. Buy JSW Steel: 946, stop loss 934, target 990

Shorts:

1. Sell Axis bank: 1350, stop loss 1382, target 1285

2. Sell Infosys: 3300, stop loss 3355, target 3120

3. Sell Mphasis: 395, stop loss 405, target 370

4. Sell HPCL: 288, stop loss 296, target 270

Investment call: GMR Infra: 20-22, 3-month target 32 (Why: Has been one of the biggest players in the infrastructure arena & has underperformed mainly due to slow growth, high cost of funds & government policy changes. Is in the process of divesting stakes & raising capital, best proxy to revival of growth in the economy).