India Morning Report: Markets rejuvenate on Monday opening

Last weeks continuing drag below 6200 lifted with the first couple of results from Infy and Indusind Bank assuring investors, commentators and analysts of effective performance.  Indusind scored a big INR 72.7 Bln in Net Interest Income and a near 30% bump in income was as expected , despite the MTM losses in Treasury (INR 640 mln booked this quarter) and despite the virtual clampdown on CV portfolios and the snaking NPAs in the portfolio. The Low US NFP component of the good news would not hold as the Taper is helping the Economy perform and the snow storm was along expected lines despite the optimism in ADP Payrolls

Infy has in the meantime carried forward from Friday completing its move on Monday morning at 3650 pts, and Indusind, Muthoot & Manappuram have also corrected from the immediate spike following results

Markets have settled in at 1050 levels for ICICI Bank and one expects this month to be primarily moved on earnings expectations with a fair sprinkling of sell on news. Bajaj Finance joins the action this afternoon with Yes Bank on Wednesday; Axis Bank and Bajaj Auto follow on Thursday. Wednesday is the busiest day of the week with DCB and Agro Tech Foods also of interest. Bajaj Finserv (insurance) reports with Bajaj Finance and Bajaj Holdings follows the Bajaj Auto results on Thursday.

The IT crowd also looks expectantly to HCLT and MindTree reporting on Thursday, showing up the depreciation impact on more unhedged earnings quantum, before retreating into a stable hedged revenues with HCLT prefering future 3 months and MindTree , I am fairly certain, hedged for at least 2 quarters

I will be looking at LIC Housing for hints on if there are any factual bases to the company being shunned for dwindling revenue and profits base but look to finding the markets wrongly subdued on the MidCa because of the limited number of Banking License successes likely. PSU Banks including OBC and Alahabad Bank also started off the train of news but mostly masking/poorly balancing increasing NPAs with dividends an d others likely to continue thru the month. OBC issued a fresh interim dividend of Rs 4. Syndicate Bank and Union Bank of India are further expected to issue dividends. BOB meet on Wednesday could be interesting with the bank not in a position to issue dividends and likely to be upfront continuing into Q4 as well.

The $34 Bln sold by RBI in the 3 mo forward market in the meantime has put paid to speculation in the Rupee apparently single handedly as the Taper remains accelerated having started ata tepid rate in December. Emerging Market equities are unlikely to be favored by more even if the growth inflation dynamic returns to a performing equation in South Asia. The CPI data later in the afternoon today may show a big dip on Vegetable prices and the weekly WPI data is positive for the expected downslide from the monthly high at 7.52% in November  (reported in the last two weeks as the monthly figure)

HDFC Bank also gets by with an expected 30% bump in Sales and profits and some grilling on the new CEO in the favored insider, MR Suthankar so prominently featured in the ET on Saturday

Federal Bank and South Indian Bank will show us again where lending growth is ossible outside retail folios, being smaller private banks with a good grip on funding and profitability. Friday closes with ITC and ttk results ,and REliance and Wipro complete Key Sensex earnings (back in play in this rally segment) and the IT pack. Cognisant’s later report could see the larger comparisons for the industry with TCS reporting on Thursday but Infy revenues at #3, though margins were back to 25%

INDIA VIX has moved from its bottom in 2013 to 15.58 still around the value at the start o f the year on 01/02 Jan, currently not xpected to jump to above 16 levels either

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