India Morning Report: Nifty above 8000, Banknifty ready to fall already?

At 16500, any move in the Banknifty after the muhurat weekend in the new year, is likely to be downward adjusting for the market and given that markets have prima facie been using the last two weeks to complain of the overt existence of only banking and financial memes in the coming recovery and thence stock rally, it is unlikely that existing weighings of other index heavyweights will improve any better but yet there is no possibility in financial stocks taking the rally from these index highs and would need a correction in atleast the secular PSU Bank contribution (to the index)

That probably means markets will look very carefully at least in the morning session but still indices will probably find a way and the right stocks to move up to 8100 /8200 level without the Banknifty later during the day

Needless to stay HDFC And HDFC Bank led private bank stocks remain in focus in the recovery and even rough pockets like Kotak and Indusind which are not really catching a break despite trying will also beat the industry growth averages to be in demand with investors.

A correction in Pharma which set into select stocks even as Lupin and Glenmark come back on the up and up is probably interesting more for the perceived contributions of players within the sector, with old favorites again being identified more with DLF and the failed real estate speculators with Gold and Oil also remaining under a cloud affecting a certain class of high net worth investors even more than the cut in leverage on existing securities/promoters’ shares in hock with banks

The Foreign investor contribution to the market rise from here will likely be balanced by an equal participation from Domestic institutions and MFs however and the Economic data for October and November may well prove to be the turning point for markets as CPI follows WPI down and is expected to turn up again before the end of the fiscal but with real growth reappearing in infrastructure and manufacturing sectors.

This week’s kitsch headlines: refueling of investments in Power after the denouement of the Coal gate investments which failed to provide the apparently available support ecosystem in the sector. In other unlisted business, the Airbus JV with SIA and a 45% FDI proposal in India could be key

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