And the international impact of an immaterial shutdown cascading to its third instance in the current crisis after a US downgrade and the shutdown first awaited showed governments globally as it did markets that it was really immaterial. The economics of a shutdown are indeed brilliant and technically still half an hour away(at writing) . It means some Federal Workers will not get paid and probably more in this instance than earlier when it affected only pensions and some non critical defense spends and not even one third planned government spending which anyway trends down having been minimised earlier
Anyway, apart from the sequestering which will in the long term impact US healthcare and Defense stock, the issue of the Rupee recovery as Oil continues south ( on weaker global /US consumption) and the US Ten year yields looking to bounceback from 2..64% on ‘No Taper’ news, India Inc has had nothing to report. Earnings in Q2 despite the all round scare will remain positive for the few listed corporates that carry India Inc on their shoulders The rebound in software exports in the invisibles however has strengthened the trend towards overweight IT and Pharma portfolios
Mitesh (ETNOW) as usual played a clear long with a pick on ABNuvo in cash that works much better thu the day than the Sandeep Waghle/Gujral technique of trying to short the edges of the bottom as the Dead Cat bounce holds and rejuvenates some banks (Afternoon update: Banks managed well, YES Bank shorts dened and F&O interest likely having picked up in those 6 bank series excl the banknifty index weighed by more than 2/3rds publc enterprises)
The CAD bounce is already in with $21 Bln in a quarter indeed by itself worthy of applause and additionally was abnormally high and the other three quarters of the year will trend barely in double digits if Government estimates for the full year CAD are spread over these coming three quarters at less than $9 Bln each That is due to the reduction of th $8 Bln Gold deficit in Q1 before curbs coming down to near zero ( restricted to 20% of imports that is not exports thru the regulations introduced concurrent with RBI’s currency control measures in monetary policy
The Trade Deficit keeps growing and again for India as for US the Net Services (Invisibles) Contribution was a surplus of $16 Bln for the quarter gone by, but the blocked imports leading to the same are not available to us to comment on our ‘cutbacks’ impact on growth. Core Industries (38% of the IIP) grew the expected 3.8% after a 3.1% in July, making the hopes of a recovery more substantive as well. Banks like ICICI, HDFC Bank and Axis will reap benefits f any rebound from their larger distribution and shorting SBI is still a neat trick int he market in terms of the looming uncertainty in the short term. In fact I would say it could break below 1500 but for the rising bear trap being locked into by Bulls in India counters selling 1500-1550 puts and looking for a trade positive on buying the 1700 Calls than writing them so its actually a seesaw.
Don’t worry about EM being global victim of the QE and now its withdrawal, the newest setup is on the Euro, with 17 weak countries holding it, as it rises into the bubble-o-sphere on US Stupidity and is potentially looking to becoming quite a safety wall for all the world’s troubles much like the yen did for three decades since the 80s.
The Banks are trading in the green and this weeks events could possibly split the bank trades between PSU And SBI negative and ICICI Bank and private bank positive in this trading rich sector even as metals struggle to find buyers as the markets still believe in a lower bottom around 5600 (and then lower still)
Tata Steel and probably two more scrips at most merit positive attention and would have accumulation from institution at all levels. The calls in ICICI Bank and IDFC are likely to remain positive though the rest of the week with the low levels of yesterday late afternoon, when the morning’s dead cat bounce ‘resumes’.
- India Morning Report: MSCI adjustments and a Independence Day /Var Mahalakshmi anniversary ignored (awardz.wordpress.com)
- India Morning Report: No Taper and Nifty on to 6100 levels (awardz.wordpress.com)
- Pockets By ICICI Bank – A Safe And Social Way Of Banking Through Facebook. Needs To Be Mobile Optimized Though (business2community.com)
- India Morning Report: Banks earnings, GDP scares markets despite inflows (awardz.wordpress.com)
- Sensex falls 348 points on rate hike worries, global cues (profit.ndtv.com)
- Chidambaram meets top bankers to shore up fund inflows (rediff.com)
- India Current-Account Deficit Below Estimates as Gold Curbed (bloomberg.com)
- SMC Equity Research Outlook: 01st October, 2013 (smcwisemoney.wordpress.com)
- India Morning Report: Dead Cat Bounce, rebounding earnings on the horizon.. (awardz.wordpress.com)