The small budget deal ‘induced’ sell off in US equities as markets talked big about another expectation of a grand bargain gone south was a chimera and institutions maintained trading volumes in the last month of business. Level watchers probably look for any excuse to start off the markets in 2014 in a position to beat the hitting target level under 10% gain estimates for 2014 and is nothing ore than the correction as a big rally build up ensued since November in the Global markets. However, Global and Asian impact correlation aside, markets are due for a bigger move south from India itself to the 6250 levels as the NSE universe of stocks has been totally blindsided remaining the same in the current shucking of picks.
Most good picks maintained their levels in the open and the NSE A/D line continues to show deeper gashes while the BSE transient update continues to hold the open as around 45% advances at 320-400 on last watch
With Capital outlays lagging business recovery, the 38% IIP reported in the core industries ( Infra index) lost the entire 8% and in September while the trade data was positive on yesterday’s release (updated yesterday’s report)
The inflation data will remain strong and so RBI will likely continue with its contraindicated stance of increasing rates into the recovery till Capex comes back ( well into the second half of 2014 ::CY). HDFC Bank leads gainers as ICICI Bank and Axis gets into consolidation while YES and other midcaps react to the economic indicators expected to shoot back up into December’s reports from the gainsaying we have had around a recovery.
Bitcoin has made big inroads in the meantime on the global scene if you want your computing time to be used seriously while waiting and we remain on the verge of over-thinking in the rally instead of neglecting weak vacillating December cues from global markets with the Indian Rupee caught on the precipice.
A 9% interest rate is not doing anything great from the Bank and Auto led cyclicals either and not surprisingly at such a time the Bajaj Auto – Hero pair trade has reversed to favour Hero probably to catch up to the gains made by Bajaj Auto in the secular cycle though Hero continues to cede share to Honda in the two wheeler business and this will be estopped in two months to the secular pair trade favoring Bajaj Auto after the markets right the discount on Hero’s final achievements of a sharply focussed new strategy in the Honda break aftermath
IDFC remains a great investment pick and markets are unlikely to follow this day’s downtick into Thursday as markets correct the desire to correlation. Some market watchers already see no further FII inflows to add to the $17 Bln already entered into in this Calendar Year (most of it since April)
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