The big news on 02 June trading will be the Moody’s downgrade of India ratings. It may not have long term implications but there could be some short term worries. The good news is that FPIs have been net buyers in the market for the last few days. Global markets were strong.

· Buy M&M at Rs.460 for targets of Rs.520 in 1-2 months time frame. The arrival of rains on time and normal monsoon predictions will be a boost for tractor demand.

· UPL has been mentioned in the past as a good bet on the back of the locust menace. The stock could rally very quickly from Rs.400 to Rs.450 levels. Trade accordingly.

· It is time to book profits on HDFC Bank and Biocon. Kotak Bank is a good buy at Rs.1240 for targets of Rs.1400 on the back of QIP and promoter stake reduction.

Trade cautiously at higher levels as the Moody’s downgrade could be an overhang.