India Morning Report: Markets negative ahead of expected rate action

Inflation rate world
Inflation rate world (Photo credit: Wikipedia)

 

Most economists and bankers are in consonance  that RGR may well post a higher repo rate number from the Central Bank Quarters today and thus Markets, teetering at 6100 levels since yesterday along with our expected markdowns on currency and bonds coming in play are negative on bank stocks and the market is ready for a pitch South of the 6100 mark this morning.

 

More than $4 Bln or INR 250 Bln have entered the markets from Foreign accounts in the two months of August and September according to ET Data and October will probably see an even higher number having come in as ETF inflows were exceptionally strong.

 

WE on the other hand still do not find such a motivation in the current inflation data except for the small spat on Onions. If the new Guv of course thinks he cn meaningfully control food inflation as India enters a critical period of recovery , it might well be, but it is unlikely to make a strong case as there are other reasons in the Supply chain and the continuing need to support farmers for food inflation to wave through food, veggies, milk & animal products

 

We also think Dabur results ae a good portender with Consumer Staples being an important watch category and if RBI policy is favorable the markets must rise with ITC results being seen in that light as well. The exceptional 10% postive reaction to Maruti’s results are of course just a sign for quick profittaking int hat scrip as trades eluded the banks in the cliffhanger again

 

Glenmark Pharma reports on Thursday with DRL and Torrent and Sanofi report tomorrow, so the Export earnings fiesta is well and truly alive exp on Glenmark. The Master investor’s Jai Corp reorts today

 

A couple of NBFCs do report today incl Chola and JM Fin (Vikram Pandit) but the market interest is ripe for pickings in the Power NBFCs as again shorts try to climb the wrong tree with REC already trading at 180 levels, REC, PFC and even PTC might react better post policy. IDFC reports on Thursday with Magma and Muthoot. Also, REligare and the PSU troupe with Union Bank and BOB joining BOB report Thursday. LIC Housing reports tomorrow. Each of these will see more than scrip specific impact

 

DLF, Bharti and bank hopeful Edelweiss also report tomorrow and will be key

 

 

 

 

 

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