After the big bump yesterday and a reassessment of the Economy based on auto sales turning positive, markets are just about keeping yesterday’s gains today and the Rupee fast losing power intraday as network analysts follow yesterday’s momentum to bull trades for the day. We liked Sun’s yesterday’s moves and expect Cipla to follow suit today than continue with Sun intra day. Also we digress but networks threw up another interesting posit made by foreign advisors around 9:30 expecting SBI and PNB to continue posting asset quality concerns. To us it seems that known good corporate governance at both PSU behemoths makes it likely that the scrips are good long term buy recommendations and should hit 2400 and 900 respectively a 15% bump each in the next few days with Cipla as well.
All granted, markets are ignoring the noise around the India story and appreciating the stable leadership, the promise of inflows to come having helped the market open while news of the coming together of brothers Ambani for substantiaal cost and operational synergies a big plus. Also on the networks picks on Dena Bank options and PNB itself in the 8:45 am preopen (TV18) was a good front if open interest can show depth and breadth IT companies present the short hedge at this time and not consumption items including HUL and the news on relief to Adani for coal inputs from the CERC is welcome
I am looking at Power NBFCs making a big comeback after bad 2012 but one must be prepared to hold till end 2014 to reap the expected windfalls in the sector and stay away from mid cap realty in the time being. Bharti’s long term performance cannot be ignored by institutions even as the company battles challenges and many passive funds would be putting the scrip on aggressive accumulation lists this year even if some had temprarily reduced positions in 2012 ( looking for hard data statistics to support both hypotheses)
Both PFC and Powergrid remain alternate trades with REC in any trading strategy and pair trading in Autos similarily should cancel out any further price cuts in Bajaj Auto and M&M. Maruti remains the plus of the pair with Tata Motors short in 4 wheelers.