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.
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.
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
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’.
- Morning Links: Bill Gross, Jeffrey Gundlach Bounce Back (blogs.wsj.com)
- India Morning Report: No Taper and Nifty on to 6100 levels (awardz.wordpress.com)
- Morning MoneyBeat: Dark Clouds Glower Over Washington (blogs.wsj.com)
- India Morning Report: Banks earnings, GDP scares markets despite inflows (awardz.wordpress.com)
- India Morning Report: A technical correction to make space in the move (awardz.wordpress.com)
- Record Defaults Seen in India on $40 Billion Recast Loans (bloomberg.com)
- US budget shutdown entirely avoidable: Obama (vancouverdesi.com)
- India Morning Report: Thursday’s bounce engenders positive weekly closing (awardz.wordpress.com)
- India Morning Report: Energy cos can rise despite Export parity? (awardz.wordpress.com)
- Fitch says bad loans of Indian banks likely to peak by FY16 (news.in.msn.com)