India Morning Report: 5900 is holding, India inc waiting for RBI to respond

Banks have started the week well enough after the post ICICI Bank call surge of weakness in the sector ith the increase in restructured assets to INR 73 Bln. The Bank still leads in NII at close to INR 40 Bln in the quarter and PAT at INR 23.04 Bln again a nice 20% uptick with NIMs above 3 at great 3.1%. Seemingly with group profits bolstered by the comeback of insurance, the banks are still sectoral champions for India Inc and the traders are just likely to spring back on the date of RBI policy announcement on Friday and unlikely to correct further from 12250 for BankNifty and 1150 for ICICI Bank hich is already improving on the results

Hero Honda results are the expected shot in the arm for that diversified Indian trading community that ignores growing Honda shares based on the history of Hero management and Hero has improved margins based on sustained internal initiatives. Buys on IT and even banks before Friday however seem weak strategies not for those outside the inner circles of bigger fund flow movers in these trades. and Nifty hardly has any upside left before new Economically resurgent data series even for the improved inflation and Fixed yields turned south since the beginning of April. Central Banks from the US Fed on Wednesday (night time IST) and the ECB will also factor into the equation for Indian markets.

The Euro can already be seen to have peaked at 1.30 levels and the pound being stronger makes it more likely that the Euro will correct and ‘yield’ to the Pound which reset long ago. Also euro had been compensating for the Yen precipice, weakening the lopsided dollar trade and the same may not be supporting the Euro even before the Fed signals change in policy direction that it may only signal towards the end of the year after 6 months of data post sequestration cuts in the US economy. Germanmarket economy is likely to lead European weakness in the rest of 2013 and the growth in agri commodity exports and reliance on other export markets than europe would still see India Inc scoring positive growth in exports in 2013.

LIC housing finance on Friday and Federal Bank today also proved good results except for the botched NPAs at Federal Bank and LIC Housing housing book growth with its parent’s investment series adding another INR 2T to the Indian capital markets in 2013 make LIC Housing a continuing ‘likely blue chip’ status on par with candidates like YES and Indusind Bank

IDFC and YES also continue to hold investor appeal even as infracos and GMR come under fire and industry environment makes a mini exodus possible at GMR after the trading runs on the other industry leaders in JPAssociates and RELINFRA

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