India Morning Report: A wild value breakdown keeping indices up

The Nifty 50 and Sensex 30 not the 100 share indices of both exchanges seem to be signalling that the tired nature of the bull run’s current phase may be taken as stable for the rest of this series with all the leading scrips of this rally turning down and significant cuts in plays like Bajaj Auto, ITC, Bharti Airtel, Jet Air and yesterday in private banks show up the traders need to create an artificial valid play or two which in other conditions without such strong inflows would have meant a sharp deterioration in confidence and even considered valid by players like Manishi Raychoudhuri at BNP and perhaps unfortunately the team at UBS a it gives them some sort of hold not unlike the DIIs that are struggling to find a cornice to climb this skyscraper with new funds.

While redemption pressures may not continue at Indian houses, the insurable surplus is higher and apart from LIC which will be looking at new sell offs and divestments like TCIL and NMDC or even the money allocated for Fixed income where yields have deigned down to 7.90% before the Jan 29 policy and surplus is left over in equity which is unable to be invested at current levels ith even Titan refusing to cclimb down and banks like Indusind (out with results today) have already been spoken for in the 40% rise.

The probable sharp cuts are here because PSU banks are no longer an alternative and speculators have no play left for this month, ruling out a downturn yet. Stocks like IDFC, ITC, and ICICI will nose down again even if they move back , while stocks like GMR infra looking to be perenially shorted could still have a one sided move left as Anil Ambani stocks catch up on the rally and Mukesh Ambani’s Reliance starts hoping for a really improved 2013 performance on the bourses i only its consumer forays could also show any signs of taking off like Reliance Capital frontrunning as new bank licencee and RCOM and RELINFRA running back up from being punsihed for overleveraged balance sheets

The Tata group scrips remain in the list of defensives while HDFC and HDFC Bank continue to straddle both defensives and fresh investible stocks with frequent outperformance probably braked upon by a full quota of investors unwilling to trade out of the scrips leaving very less floating stock out there to be of interest to others.

Banks like Indusind, Yes and Kotak despite its selling down of this rally remain the best bets for a strong outperformance in 2013

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