India Morning Report: Rupee crosses over into 2014 range, Growth cycle pumped up?

Rupee hit 57 in late local trades yesterday and perhaps another 1% variation from here would be the stable bottom of the new range for the currency and with Oil trading back into a comfort zone from 103 for Brent now, there would be a confirmation for those willing to bet on the Rupee as fixed income markets appear quite sanguine about the 17th of June Bank Policy announcements even skipping the rate cut as better liquidity moves the rates from the right margin to the middle of the bank rate corridor, but a rate cut is more than necessary to serve the purpose of credit growth converting into GDP growth expenditure as government spending will likely remain subdued despite it being an election year and gold speculation likely to catch fire again from June onwards.

The Aussie has probably fell to the end of the current repricing mark on it that started in march from 1.05 to 0.95 currently and with the Rupee having inverted into a new zone without tacking a correlated destruction in equity values markets wuld stay at 5900 not 5850 in the coming uncertainty whle making attempts to go back to 6050 and higher. Q2 results unfortunately will totally wipe out the Q1 outperformance from the sudden crisis of confidence pending rel withdrawal of liquidity and thus Q3 starts at a disadvantage,for India Inc, its out performance defined by the current trimester’s underperformance. Still one does not expect the IIP numbers for example with other economic data to deviate from a linear climb here on giving a stable base for FY14 and FY15 performance, those waiting on the sidelines still just worried by the CAD and fiscal deficit interplay, and the fact that this sustained investor inflow environment expected to rain on India through the period from end 2007 when it became obvious that India was charting an independent growth path has actually rained on India almost at the end of the uncertain period globally, highlight only India’s habitual underranking on global destination scores for FDI and portfolio investment and its stagnating investment shares in Global and Asia ETFs

Jubilant leads the wannabe pack down as Titan, ttk and Dominos Pizza turn out to be just like other businesses in the crowd, despite the initial jumps in performance emanating from real business growth and performance quickly tailing high investment expansions into the erstwhile hinterland of Indian tier 2 & 3 towns emboldening others. DTH continues to be srprisingly uninteresting for pe despite real growth and continuing policy commitment in the sector delivering returns all around and should probably get at least some part of the Deal Calendar by FY14 from sheer opportunity as probably plays in th sector continue to lac in scale, steeped in ppp pricing of local markets and thus delineating successful growth trajectory without any comparison with other local and asian markets of the sector.

The last attempt at bear markets having fallen apart, there is a rush to put a buy rating on everything and though we never encouraged you, if you have infact attempted shorts because of the flow from analysts, you should have exited in today’s morning session. again upside will remain capped, a fast growing volatility unable to sustain abnormal trading profits after a almost year long run establishing the recovery in economic fundamentals

YES Bank, IDFC and even GMR will now make great investments for your portfolio and ICICI Bank and Bharti may not fall much further from current levels for another 18-24 months to come despite vision crises revisiting thm from global investor expectations.

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