Rupee should trade stronger in the mornings this week but strengthen through the trading day as markets refuse to duge. Any break South has normally been capped by the Rupee’s crossing 56 also , topping out at 56.40 and likely to remain so for time to come.
Banks and Healthcare remain long only picks. SBI and PSU Banks make great short opportunities and the three private banks apart from Kotak and YES will be handling the Banknifty’s stabilisation effort with ICICI Bank holding 1000, HDFC Bank 600, and Axis 1030. The two Union Bank and United Bank couls be among those who go deep south as SBI moves to settle down at 1600 levels despite its $750 mln profits which it repeated this quarter as a 5% Gross NPA scoree on a INR 10 Tln loan book with mostly MSME customers further skewing your confidence in the bellwether and despite high NIMs, the bank will suffer for the sector’s uneven practices in lending esp relating to underwriting ‘corporate’ accounts hich regularly fall behind in payments as much as INR 110 B slipping this quarter. Rate cuts from RBI will not follow in a hurry