India Morning Report: Cheerful markets for FDI inflows, Pensive memories of a growth phase of IT industry

Jet Airways IFE
Jet Airways IFE (Photo credit: Wikipedia)

 

If IT were a mere product than employment for millions, it would be seen to be in its mature post growth phase ready to be phased out by a new product or business. That is not a valid hypothesis, and perhaps not a valid criticism but yet a good attempt at slang , street smart catch up with the good times. Even as HCL Tech follows Wipro as Wipro opens the week headed to more than 10% lower at open, HCLTech will likely lead them back once they reach a sub 300 level here. As long as we are on the out tray, ( out of fashion vs being the ‘in’ of the last two decades) one might also reserve judgment on the golden M&Ms, Mannapuram Finance and Muthoot, both actually having been thru worse in the last two weeks but that we’ll underwrite as being on the up and up from here, calling not just a bottom but an active clawback, though one might rule out active recovery in these till results season stars are over and infact the same can be ruled out in most of the midcap.

 

On individual scrip recommendations apart from commending the HCL Tech short by Mitesh Thakkar and exhorting my readers to go forth and make profit on HCLT.NS corrections, to join the stream and strengthen it for bigger payouts I would just add one bit of caution against non recommendations by Ashwini Gujral on the Jet Airways story. Anyone who thinks Jet will remain in this channel and not reach 550 again is flawed or limited by their prior analysis of a different fundamental and as Technical chart Guru Ashwini G. will just exit this limited (non) trade idea of his once the scrip beats prior targets and resistances and Jet Airways per se remains one of the strongest MidCap non Blue chip picks in the Indian markets on par with pharma midcap plays which realty speculators and chart gazers run easier with because of studied volatility and proclivity to oscillate in SHM around the mean traded price almost at beck and call.

 

Similarily Mr Sukhani’s view on banks and the nifty are always a little tentative at ‘U’ turn moments and one should not discount them in a hurry nor excessively mind them while looking at even positional trade except when one expects to run in for an intra day bet or two. Bank of Baroda may not grow faster, higher and stronger in a hurry but Banks per se have been out of favor unnecessarily for long part of the 2013 trade and as they remain half the market cap and two thirds of the liquid market one would venture its the easiest pick to grow with if one chooses YES Bank at this time, headed to unknown heights on its stock price.

 

The April series has seen a 14% decline in IT till Friday and the index is safe for 5600 puts sold positions to build further as booking profits on sold puts of last two weeks is likely happening in the first session (before noon) as we speak. The Land Acquisition reform Bills are to be keenly watched before the market tires of this brief comeuppance yet to be characterised as a rally while Fixed yields weather down to 7.75% in grudging admiration of the Rupee’s performance, inflows and the fiscal accounts. If the yields had indeed been leading the trend basis the conomic forebearance of India inc and the improving data, they would have fallen to closer to 7.25% even by now and thus one sees a lot of strength available to equities if the results and statistics can keep the faith making a mid week tentativeness a good point to start a big positive institutional trade even as HMT restructuring is approved and coal supply agreements signed. Coal India’s divestment plan is still threatened and complicated by the LRB (Land Rehabilitation Bill) being on the table in parliament and the Food Security Bill precariously close to being threatened by a cornered but fragmented opposition

 

 

 

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