India Morning Report: May the force be with you

Pharma gets in on a lazy Monday as Divis Lab and Cipla seemed to have great stories going for investors to get back on target. The MSG show is completed and BoB trying to replace PNB in the survivors from the PSU queue in the great shucking of banking stocks is likely to be tested as markets assess another move up from 7950 levels because of the possible strength in infra at this low valuation. However, Real Estate and IT seem to be worry points and being speculator favorites the lack of green signals on these sectoral picks is unlikely to be comfortable for a market with volatility lows already a no go in the India market from last week’s experience

F&O markets however show the accumulation of puts sold on 7800 and 7900 levels and a cut in Calls sold at 8100 levels, meaning the pressure to move down is lifting for markets in the October series which is also the muhurat trade for the Hindu new year on Diwali. The muhurat trade can again be a symbolic alignment to the new levels but even if there are no new highs markets are likely to keep a positive move in the brew than a money making big short for the festival spend.

I would invest in energy scrips in a turnaround economy like India despite the global weakness in Oil prices because of the inherent demand explosion released for India’s new surge post 2013 lows and the twin advantage for profitability from market linked pricing for both upstream and downstream OMC  plays. However at this juncture IOC seems to be more ahead of the pack and may already be fully valued in the recent rallies

(The headline is a quote from Star Wars, used by the PM in a tete a tete with the young audience at Madison Square Garden)

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