India Morning Report: Its not going to be another day on the bleachers, Mr Jones

Mr Jones, being the aphorism creating reference from the white explorers of the 15th century in a smart tag often used in everyday winners dictionaries.

Well, most participants in the market will vouch for a slow and steady influx returning to the Indian markets as we wait for the data to pour in. As buying did occur at the lows after mid morning trades on Monday, the markets continue to try and fail at locking vacuous prices for new buyers and leave a large intra day range on the indices, but it will still be mildly positive on increasing OI in the new series ( from rolled over levels that are near normal) esp. with PNB back to an able Lieutinant to SBI on the bourses and no one daring the Indian lead bank despite continuing horrendous numbers extolling pain on its balance sheet which will continue till the best recovery scores are in late next year.

BHEL and SBI investors are unlikely to back out till a knowing FII dares a big short, not required in the limited weightages and expectations from Indian markets. That only I can grant a s confusing because with a preponderence of average joe opaque hedge funds most Dr Jones would benefit from shorting to create funding in this market, and that speaks volumes to  the limitations of doing business having created this market impasse that is going to keep activity tired and lethargic at 7300 levels as markets fail to recognise it as a new high or a restful break to higher levels, dithering because only of the waiting game as DIIs are definitely not going to extend buying unless thre is a sufficient impetus in individual stocks, markets having caught up on fair value.

But FII points of view and Midcap rage apart, there is also a requirement to underline the coming recovery showing in data with a leading data series or more than one that actually cann see the recovery ont he ground, leaving Auto sales to do the morale boosting this week with inflation at Core CPI baskets continuing to rein at 8%

Investors still holding longs continue to win in the new government’s settling in period, a classic for enticing new investors with real results,retail traders let down by the Interest winding down in IT but also a fairly shallow level of business reporting from MidCaps which braver ones continue to ignore in market punting herds but is even showing on the portfolios of accomplished investor traders like Rakesh Jhunjhunwala. Ultra HNIs look forward to the big long in Gold coming back again at 7300 levels, much like they were busy trading Oil, Silver and Gold after the winding down of the big trade  at 5500 levels of the Nifty

Hero Moto as expected is winding down after a double header staring in Festive season , ramping up on distribution and models in rural strongholds while Bajaj Auto celebrates the coming improvement in exports and domestic sales. In 4 wheelers even as Nissan and Ford ramp up exports to near overall Hyundai scores, Maruti has probably been treading dangerously overbought levels ahead of a slightly better number in May, with April not being a lesson enough for the trade.

NBCC results continue to be consistent but not to the outperformer level needed to compete in MidCaps to enable the making trade while JP Associates also turns out to be a damp squib in the expectant Large Inra plays coming out of a large dormant shell since 2009

Banknifty is unlikely to rise faster or higher again but is strong at 15000 levels with most banks happy to trade further from these levels YES Bank being in fact still undervalued for being ignored or pushed down on lack of comparative vbusiness volumes with the other large trade candidates like ICICI Bankand HDFC Bank and one suspects the Indusind trade, despite their patchy oneuppance one quarter a year, is still expected to be another vibrant day or two in the coming series.

Infy buyers will probably hope for sub 3000 levels again as TM follows down and one sees in this scenario anoither strong month for Relinfra and IDFC both together with NBFCs like LIC Housing leading the way up from here and Banknifty back to highs supported by Domestic cyclicals but bellwethers like HUL vs ITC vs Bharti splitting the individual gains.

Havells results confirm it as one of the favored trades, we personally having being wrongfully waylaid in the earlier trade from 2012 because of some patchy quarters and a corporate campaign confusing another section of the erudite newby market watchers, so unable to predict targets. Jyothy Labs has recovered its merger costs and is operating some good fine tuned scores but Oil India and other Energy results are likely to keep important rallies waiting for a day or two. If one were to look for shortlisting winners again from that half dozen one would add IOC only to GAIL and let the BPCL story be for the time being after their gaiins in this rally and thus again a lot of disinterested watchers on the bleacehrs when it remains in fact the better buying opportunity of this year.

Jet Airways could be a good trade in a quarter or two and should continue to benefit from accumulation by investors as seems to be the case for Divis lab and Auro Pharma . The Sun Pharma trade is dead? Also, earnings plays this late in the earnings season with Q1 of the new fiscal set to close soon is really expecting too much allowing promoters to target a more fatter passive investor book for themselves by just ignoring quarterly and annual report periods

The IPL qualifiers/Semis however are going to be damp squibs in the 1-3 2-4 format with two strong teams riding it out and KKR’s late fightback as one of the best wasted in alikely clash with Mumbai Indians later

Currency based impacts should not douse interest in Mid Cap Pharma which remains the big story in the recovery year with some big drug molecule markets under the belt and are far superior to Mid Cap or Large Cap IT stories which are anyway flat on revenues and slower on profit aheadof the backing out of Rupee gains from the business jotted down.


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