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"BUY TATAMOTORS FUT 2 LOTS ABOVE
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We
have now cut down our exposure to metals. We were bullish for the past 4-6
months but now we think that the rally has peaked. Aluminium or copper might do
better than iron ore and steel and so we have cut down our exposure to steel
and moved to autos. Now it could be a contra call, now we have been
recommending to buy autos. We think that the valuations for autos are now at a
reasonable level. We have seen that the commodity price pressure has impacted
their gross margins and is now going to ease as they have started taking price
hikes. So I feel the margin pressure for auto companies will come down over the
next couple of quarters. If the monsoon is good, then the rural demand might
also be strong. Land prices have moved up, which also will have some rub-off
impact on wealth perception in rural areas. So all these factors are nicely
aligned for auto sector to do well over the next 6-9 months. We are neutral on
IT. Chemicals and agrochemicals, which are exporting to US, will see good
demand rebound. US may grow in the range of 6-6.5% but we may be in for some
surprise. If that happens, Indian exporters will be in focus.UPCOMING RESULTS-ITC & PVR