India Morning Report: This whole Budget sentiment thing…

One feels of course for traders who have stuck on to the ‘secular’ bull run in the markets since August thru the win , but wishing for the continuing rally to be a Budget score is almost daydreaming. Even considering the sincere no. 2 granted to the portfolio, one is probably looking at more policy execution trademarked as the PM’s doing from other ministries and only more policy pronouncements and allocations from the budget.

The key issue remains of course if one would exit to reenter this market later and likely miss the bus or stay in and assess the risk of staying in post budget and post quarterly data pronouncements in July. One does feel that one would have a lot of upside boxed in the market in either case and 2014 has much more to deliver on real results coming from the Economy backing India’s claims.

Open interest is ramping up and not a clear indicator either as VIX moved up for the second time in almost the entire year to date with a big positive move on Monday covering to 7650 levels on the Nifty still under the 77-7800 mark and the Sensex looking bright and cheery at 25600. Any receding of the index marks would probably only score a point of ten under 7500 and the Banknifty is also ready to move from 15500, probably looking at the quarter’s banking performance for a reason, which however is unlikely and any 20% + growth in topline or profits thus limited to active head of the pack picks like ICICI Bank and HDFC Bank

YES and IDFC would real any significant move days and a 50 plus move in the meanwhile is definitely breaking a few records everyday

According to data on TV18, GMR Infra is trying to sneak back into buy lists and could be a big big play. The relaxing interest on ITC and Bharti is however a mistake if one is going to be rewarding performance in this market. A play on NTPC or Coal India could again be mistimed and Power NBFCs in good steed yet, though a new trade will likely wait. Domestic Pharma along with the Power NBFCs can probably use the rally to increase the marks an  there is more than a chance they will not return to 2013 lows/ highs as they outperform in this long term move up. HUL will join back ITC on the long side after a 50 point cut below 590. Bajaj Auto and Heromoto again probably alternate as the news of Q1(Fy15) starts firming up.

Chris Woods’ /CLSA conditional target on Bharti seems misplaced as most of the strengths of Bharti remain in the India/South Asia markets and Africa is not going to be an overnight turnaround. Short IT  the top of the marks today and tomorrow for best results. (Lather. Rinse. Repeat.)

The big rally in debt is upon us again except for any still busy exiting Indian debt from May as we move into high gear for rolling downhill to sub 8% yields and rate cuts become part of policy de rigeur with a likely tamp down  in yields to below 8.5% for starters ignoring the “subnormal” monsoon forecast (more of a hoo haa at this point in the cycle after a good year and with consumer spend ready to stay up)



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