India Morning Report: And we all start back at 7850..

..Or less. The IIP reports for August as we expected tanked to another low of 0.4% as in July with Capital Goods counter intuitively but as per observed conditions showing double digit negative growth and Consumer Goods as we prognosticated skewing the condition with the Core Industries (38% of IIP which is primarily a barometer of the manufacturing GDP) staying healthy at just under 5% growth

The global markets uncertainty put a spanner in the works for the unseemly yet shrewdly topical to India reasons of there being no decision i.e. while most other Asian markets battle outflows including China ( for being heavily invested) investors committed to India too want an easy round of profit taking before committing further as they double down in Indian debt and get ready for the secular upswing after controlled inflation reports of the last few months raise hopes for Food and fuel inflation also to come down

Markets may thus preemptively start buying but only tentatively as results in Banks make it almost certain again that banking and NBFC businesses with Pharma will be the most profitable and thus most attractive to stock market investors going forward as well. Some new mid cap names and mostly flailing stories from IPO’d jewels and Consumer companies make the other side of the equation almost as tricky as the other shallow Asian markets like Korea and Hongkong. Just dial continues where Jubilant Foods left off but except for Page industries and LL the Talwalkars, Travelcos and the newly IPO consumer companies trail behind in performance leaving infracos the most likely has stalled projects come back on the rails.

The India story now another easy maxim, Modi, Modi and Modi..and the recovery could well start from 7800 levels mid day or there is more downside as F&O disinterest deepens at flat levels and India tries to come out of the lowest volatility levels in global markets. Buy Bharti, ITC, Glenmark, Yes, ICICI Bank and IDFC among others and do not stay with Bajaj Auto as Hero becomes the buy end of the pair for this month again

The Infy bonus share issue announced with results on the weekend (Friday) at 1:1 is likely to rerate that stock ahead of TCS as well as post bonus prices will have the best chances of reclaiming the 3000-3500 levels

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