India Morning Report: Markets inch up in time ( to discount better earnings)

Markets are able to easily move up to 6100 levels as earnings baselines have increased in doubledigit CAGRs since 2007 and 6400 has been conquered. Rupee markets thus remain buoyant with EM outfolows reversing after $16 Bln in outflows including debt markets from India in December and January apparently

Bharti and HDFC/HDFC Bank have seen FII selling (LV) and are correcting with the spectrum celebration priced out in the immediate after as debt concerns remain.

Optional addins: However telcos will consolidate on their combined effort in making a real time market respond to overpricing bids by the governments if you count each arm of this diversified bureaucracy with an apparently non working polity (BJP) and a misfiring chaiwallah (Modi increasingly sounding like his stock is due for a big correction, anyday now, no fundamental value showing esp on the home state Topic)

Tata Motors may not be able to celebrate JLR sales again this quarter, still the easiest short in the market and Ashwini Gujral may end up with more buy picks than sell after spending the morning on the down trade to ensue, I agree with his buy on Cadila Healthcare with 61% rise in USFDA business (31 new generics licensed to them) , its annual revenue rate rising to $2 Bln and likely to be a straight line up till a $1 Bln per quarter is achieved.

Glenmark and Aurobindo continue as buys. DLF has a big day today after the sale of Aman Resorts worked out. Contrary to a section of the market hoping for India to be counted with China, India has to now compete with China after the bank regulator there assured markets of liquidity with FIIs continuing to favor China investments by a factor of 10X or more and Global 500 companies continue to shore up higher volumes and profits in those luxe and westernized aspiration markets.Look for our Monday morning round up ont he global markets in a few hours at

We’ll need to be back after the Governor Jalan chaired meeting on Bank Licences.  Janet Yellen’s testimony on the Feds plans is due Tuesday and Thursday and RGR would be among those watching. As we said last week, things look better for Indian corporates looking to tune up domestic and international growth plans and India’s short term debt pile is not that high especially with a 4.9% GDP performance for the fiscal. The Japanese Yen has finally started down from 102.3 levels this week growing the CAD deficit with weaker exports even as the US deficit turned out higher than expected with a $38 B trade deficit.  Japanese Yen hopes to reach 110 levels over the course of 2014 to boost domestic exports and further boost the growth seeded last year by a turnaround in policy. January is past in US payrolls making further prediction easier. Asian markets saw the reurn of Cit to top of the honor roll in debt markets this week

The Sterling TCIL deal has been signed with an open offer from Thomas Cook in the markets. IDFC is up on license news, but levels are good to continue accumulating. Bets on License additions are still sprained by the fact that only 6 of the 25 applicants may be successful before the licensing regime moves to licenses on tap at a future time(being considered). YES Bank is up for some good bull spreads as the Bharti and ITC trade takes a breather and Pharma stocks also interrupt a 4 week long bull trade. Banknifty will deliver huge gains as new constituents to the index universe get an in and PSU banks deselection (im)probabilities rise.

Securitisation and Fixed Income markets in India continue under the regulatory glare in a bid to expand the player pool(correction tick in dull late morning trades) and HDFC Bank is stoic in the middle of the 600-680 range. The hopes ofor a rally improveas correction in IT stocks deepens and indices stay on target for 6100

One would have expected the energy companies to be getting more attention after the changes in gas pricing worked out well for the State’s Welfare Economics keeping India’s fiscal concerns well at bay. The stocks are still worried on counts of subsidy expense deferment hitting upstream companies ONGC, OIL and GAIL. The outgoing Finance Minister has promised a debate worthy 20 pager for the Vote on Account due on 17th February and GDP estimates for FY2015 will again be in the 6% ballpark. According to Tanvee Jain of Macquarie as shared on Profit, the Gross Borrowing for FY15 is expected to be INR 6.7 Tln and that remains athe single biggest reason for Fixed Income yields in India to continue northward.









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