India Morning Report: Markets completed the weekly move on Monday?

While the 8100 put floor is likely sign of things moving up thru the series, there may be another consolidato=ion on the week’s gains as there is selection amongst the cyclicals all over again, while ICICI Bank, HDFC Bankl ( on merger with HDFC) , IDFC, and YES run to leading investor interest and Hero’s sterling performance starts recalculations again but the Bajaj model seems strong enough on its own too and Honda would still likely target Hero in the same segments, skewing expectations albeit from the unlisted space. Power NBFCs look undervalued for their robust models even at new levels

India Morning Report! Not that it is going to matter..

For one, we won’t be writing much this week. For the other FIIs though no longer moving up the chain are definitely continuing doubling down on Put Floors which have definitely moved up over the last 2-3 days of the week closer to 8100. Autos and Banks are definitely great investments and so is Infracos and Power NBFCs financing the capital dream. JP Associates exit is key learning for all of us and markets will be brutal of companies with Infra Financing pedigree selling down operating businesses for a song just to get out of hock/debt

In the overall scheme, it looks like 8000 is no mirage and is here to stay and the week will have at least 2-3 up days..happoy hunting! Portfolio inflows are up to ` 60,000 crs every other month ( counting both)

India Morning Report: Its a slow yet positive day for markets

And it is in the blue sky zone of a lasting rally that has just begun from 7900, gaining confidence every day, institutional buying no longer a necessity but just arbitraging off the required liquidity while complex hedge strategies remain unrequited as Put floors make markets complete and investors board the Train to India after a long crisis induced hiatus, though portfolio flows and FDI were bigger than ever in 2010 too, the response much more encouraging now with a Modi government in place. 

IDFC and ICICI Bank finally seem to be getting into the groove again, no longer monopolising trades but better than any other staple pick by far (sic!: {Head and Shoulders,for all values of expertemporaneous burn scratch late comers}) The Sensex is almost looking stopped at the slow pace of the week and is actually at more value at 27000 levels as it needs to cover to 30k to break into the same foxtrot like the know all Nifty dominating investor mind sets

The auto ancilliary mid pick storm is likely to be another hail mary for the industry whose export counts or continuing slow Indian growth features scare the bezeezes out of knowing indian investors and will likely be a tad better than the real estate hocked pack in giving company to the select few that indeed merit continuing accumulation and investment. FMCG and Auto have climbed out of the trenches this time with Bajaj, Bharti and ITC giving greater strength and Pharma and Energy remain the best sectoral climbers in the Indian market till any infra momentum starts the hill off to a roaring start

Power NBFCs and bidding Infra monolith IDFC meanwhile steady midships and continue to greater strengths



stub, needs rewrite 😉

India Morning Report: 8100 was a no brainer, curb your enthusiasm!

It seems,however, that with each passing day, the market is too happy that it is indeed waiting right and gets into a wild move because everyone is on the same side and a counterview may be needed making this smooth penultimate peaking rally of Indian bourses a little more choppy, probably a sharp down week from 8200 or an intermittent slow down slide over the next three days. The closing basis moves seem considerably stolid however. I t may also indeed be that the active trader community is busy counting each landmark and chewing nails in anticipation from being a t new levels but they would do well to run slower waiting for the real consumer and investing cycle to grow the GDP growth to realisable sustainable new levels in 2015

In case you did not appreciate the above, please write in your minority dissenting opinion before wildly chancing your new blood in the volatile markets USL in the meantime seems to have completed another cycle of foxy transactions following up Black and White’s clean transfer with another cleaned Diageo asset break.

CIPLA and CESC both seem great picks for all time and CESC /CIPLA also alternate being part of the cyclical boom which theoretically may count against their stolid stature as a defensive but is more in tune with the extensive market development component of the few everlasting brands and enterprises on the India consumer mindmap that are listed in significant growth markets and have considerable growth potential individually exceeding the market

Vishal Sikka continues his challenging assignment at Infosys , choosing to be in the public eye as a rebranding strategy for the corporate governance star of yore as cost concerns flood the outsourcing market for another year and more

GAIL is probably back with the Power NBFCs on buy and trade up lists. YES Bank and ICICI Bank finally seem to have hit a good patch though a spotless record thru 2011-2012-2013 ended up engaging them in a standoff with the bloodied and yet trying short traders as China remains a bigger flow attraction for global funds

stub; needs rewrite



India Morning Report: Markets inch up to 8000 levels on futures trading higher

As mentioned last week, most stocks are ready to move but being at overall new levels the blue sky moves are finding it harder to stay in the range of certainty in no small measure due to GDP growth still pending return to growth cycle levels if improvement and cyclical demand expected to improve still not doing so. The SC judgement on Coal should largely have been ignored as a fait accompli by the markets and this expectation of policy reversals in each and every item is highly disconcerting, given that none of the 200 + allotments had produced anything since theiur allotment a decade earlier

The Indian currency is holding 60.5 levels even as another PSU bank corruption case breaks cover in the media and we move on to the next set of reforms long lying unchecked on the agenda and investors getting hope from performance of the select fundamentally impermeable stocks in key industries

SBI has started rate cuts early as expected in home loans above 30 lacs category and the coming competitive scenai=rio unfolding may be great for reviving consumer sentiment with ICICI Bank only expected to follow after 3-6 months given their strong hold on their consumers as well

Markets may find yesterdays highs easy to emulate  again during the afternoon though surprisingly with greater contribution for new midcaps hitherto not participating in the rally



India Morning Report: India GDP announcement a key market rallying number at new point

Markets have consolidated and stepped into a new range after a longish dismemberment of a Modi effect rally in two weeks since August 8. As Large caps consolidate at new levels, banks have finally started moving up again, HDFC Bank in lead but PSU banks still selectively showing signs of NPA fatigues and continue to dress down assets. Bhushan steel machinations also put a question mark on lead bank SBI’s fortunes as it navigates a INR 100 Bln exposure with new recovery approaches including an ambitious extended management participation.

However SBI is stil undervalued at 2500 levels and Maruti and Bajaj may also have flattened out at lower levels after an unreasonable advance surge ahead of the April May trough from which Sales have barely started picking up in the last two months. Falling prices of fuels greatly aid the return of consumption based GDP growqth ahead of deeper investments expected to line up in infrastructure and in the broader economy including at FMCG and Metal and mineral companies

India remains in a strong position in equities in 2014 and can find a couple of new fat pocket investors lining outside its doors as Emerging market flows remain negative for markets like Thailand, Turkey and Russia and even for Mexico which showed quiet promise for US based companies. The 8000 mark maynot be a big deterrent for markets as a GDP performance of near 6% excites markets and new FIIS take the markets to record investment levels again after the rush in 2011-12

The new investor sponsored surge in Infosys as the new CEO unveils a market blitz to create phantom growth may well be accepted by the market but is more likely to turn out empty as any aggressive strategy has been in the Outsourcing and Offshoring market”: after years of market development investment by leaders like Infosys

NBFC LAS regulations have been tightened reducing the flexibility available to them to lend to promoter investors and ultra HNWI markets that depend on the facilities. However one is unlikely to see a real reduction in LAS volumes from the tightened regulation even as some rare stories of collateral being called by banks do come to the markets ahead of high profile restructuring like USL/Kingfisher and other accounts. Prices in the real estate market on the other hand are unlikely to come down and thus improvement in demand in the sector may take its time ruling out much change for the rest of 2014

The Modi roadmap on reaching a third of the unbanked in a single year is indeed laudable and doable without much ado increasing the involvement of recruited correspondents and allowing Post offices to defacto represent their stations as correspondent. 

NSE Cash turnover has clearly grown ahead of  BSE further since 2008 when it had flatlined till 2011. Options have jettisoned 7900 completely at the top of the range while Puts move up the floor of the range to abbove 7900 and Calls take to higher levels thru the week including 8200 and higher levels bu tFII buying indicates a likely focus on Futures contracts, sign of hedging at new levels in the markets


In unlisted business, the new collaboration announcement of Arvbind Mills with GAP is indeed worth watching as the retail markets are poised on a good kick off point and markets have been expanded by the healthy and growing competition between E Commerce firms like Flipkart and Amazon.  A new pizza seems to be the “hotdog” in a rare direct fight between Pizza Hut and Dominos. The latter has been taking care of competition in Tier 2 cities since its IPO in 2009 but has recently flailed in growth while Pizza hut has been stop starting new investments it had outlined for India back in 2010

Energy realisations falling may not be all bad news for Oil marketing companies and upstream producers as demand returns to the market


India Morning Report: Burn its still the new year rally

The shorts will likely pay badly for their early 2011 shennanigans as bulls leave the outside the offstump temptation well alone unlike that famed middle order and the retired doppelganger and a to be coach with the big win record ( those not interested in Dhoni semantics and test cricket may leave the outswinger / beamer / valid ball too) Dhoni of course should have tendered his resignation in any other day and time and become a selector instead.

Back on the markets. the markets are on the ball and the budget expectations would be built by a media raring for something at least as positive as a 10% growth target but which realises that India Inc is up against a wall and continuing to perform for one of India’s best performances right in the middle of the Big Fisal Canyon where governments of NDA, UPA, Economists and Politician Heirs have hung themselves out to dry, India Inc having left behind the game of riiding on low base performance effect to produce performance and India’s fiscal disadvantages showing in each month’s import bill like it was that night club in Paris

And there end’s Thursday’s serial effect on my language above. 

India inc has nothing to report having already set up great expectations for FY2014 and the government has nothing else to showcase having already shown its hand and unlikely to be able to do more than basic math to produce anything inspiring in the budget and that would (wince@leisure) likely lead to electoral giveaway type weak discipline being held up while like the DTC , GST and other fiscal discipline thru math and thru law is thrown to the wind a day after the Feb 28 budget presentation. 

Why any of it should lead to any further reduction of FII interest is the pertinent question for the markets and having founded a specific India club like the very standalone India Inc itself, India is unlikely to see anything less than a 50% increase in FII positions as they know exactly what is ahead while the Emerging Market Juggernauts which ETFs received 50% of the $8.6 B into equities in the first week of December and FII inflows and FDI inflows would scale near to their all time indian peaks at $35 Bln in FII and $25 B in FDI instead of $45 Bln or as China produced after two years of struggle at the bottom –  a clean $100 Bln for CY 2012

One hopes the budget is able to operationalise Debt financing and quasi SWF  financing for the great $3 Tln Infra spending chasm  and add to education and healthcare funding but ” it ain’t gonna happen” dear

in specific stosks, ITC seems to be targeted to correct all lifestyle conpanies ( Consumer Non discretionary) to a good restart point and that tells me both ITC and Bharti (Discretionary/Infra) will likely keep most of their new levels in the new rally to come. IDFC is up next for big hitters and should continue the strength in Power NBFCs from REC and PTC(despite the odd ball newsiness) or PFC and Powergrid while LIC Housing finance has definitely moved int ot he bigger speculative position plays than in 2011 or 2012 . Kotak and YES could be the ones benefitting most from institutional reclassification into “BLUE CHIPS” of the india portfolio



India Morning Report: More Fiscal uncliff, more detachment for India Inc ( Re Global Auto Sales)

Village Sasan
Village Sasan (Photo credit: Wikipedia)

Fundamental structural changes notwithstanding rating agencies globally keep getting the same standalone cues for India and India fortunately or unfortunately remains studiedly isolated out of world karma.

For instance, the new Dy governor of the RBI, Urjit Patel might have a hard time marrying the global recovery in auto sales with India’s first Chinese imports and the M&M resurgence as part of any global trend even as China runs ahead to a 19 mln Cars in 2013 projected higher than all of Europe

But then inflation is unlikely to go away as a critical agenda item soon and another is the return of Net Investment by Corporates in Infra or otherwise ( I heard the Infrastructure Commission has been redesignated as the inter ministerial committee on Investment or some such thing, equally incapable of moving the 1000 odd projects waiting for final approval(s) for financial closure and take off. )

The Rupee in the meantime responded to the great optimism in the PMI data and reform cues even as details continue to elude and the question of criminalised politics, a tell tale barometer high mark of inactivity on the horizon become the key issues of the day despite shorts trying for a quick comeback from the new 6000 mark and probably encouraged to journey up their stakes on the ennui coming into the new year.

Lupin and Glenmark remain good picks in Healthcare and Ranga committee’s answers for future Energy projects and thus Gas pricing get closer to being implemented. Reliance Power has already crossed the hurdle where it can now repurpose coal allotted to Sasan to working projects including units at Sasan. The Diesel subsidy degrowth thru steep increases may see light of day only in the second half of the year while the 30% + deceleration in Gold imports by nearly 50 Tonnes per month is apparently not enough for the Indian currency to come back meaning Gold smuggling may have further skewed the data.

Stride Arcolabs also celebrates another good day on the bourses, we also remain optimistic for banks even at a 12800 Nifty to keep getting rewarded for being private sector performance and get questioned for being PSU unless you are PNB or BOB and we hear BOI. The last two could not hold on to any semblance of performance in the last quarterly results either and PNB itself is struggling with increasing NPLs while others seem to be dead in the water including Canara, Syndicate and UBI & UBI.

Credit card spending (ttm November 2012) has recovered but is still 20% below 2007-08 levels and more encouragingly Debit Cards seem here to stay. MNC banks have restarted consumer credit operations as ell but their market share remains below 5% including their strong Corporate Credit business and strctured risk sold to corporate treasuries

Education and Healthcare spending are unlikely to cross the 1.5% mark of GDP for annual spends till the end of the current plan period in 2015. The more things change, the more they remian the same.

India Morning Report: The short stuff stranglehold and more consolidation..

Those hoping for a correction as DIIs called the market wrong 2-3 times before the markets left them selling into a rising market and handling redemptions but based on the predilection for that correction shorts have already bled in trying to sell 5800 Calls and had to roll to 6000 calls in December series. That ould seemingly have been a nice time for an exit and now, new top range of the market is well settled nearer 6200 where the new Sold calls set up the top of the range while those holding the 6000 Call premium of about 100+ are likely to be trapped by bulls and doused fully in the run past 6100.

English: India's Minister of Finance Palaniapp...
English: India’s Minister of Finance Palaniappan Chidambaram is the special guest at a plenary session titled Risks to India’s Economy in a Post-Crisis World held at the World Economic Forum’s India Economic Summit 2008 in New Delhi, 16-18 November 2008. (Photo credit: Wikipedia)

Nifty hits 6000 on way to 6200

That of course is just more details of how shorts including DII managers like Madhu Kela who were long on the Indian economy but haave been battling continuing redemptions and the lack of opportunity to buy will be hurt in the January series before the markets start a downward trend most likely post budget as euphoria over policy finally dies out only after new budget announcements and tolerance for fiscal slippage and the new range for targets for FY14, 15 and FY16 that governments across the world and P Chidambaram must use wisely. Avoid IT esp Midcaps as shorts would concentrate there while the market achieves 6200 to help them fund their trades to the North pole

That also means that markets will likely remain above 6000 in the run up to the budget and supports at 5900-5950 are likely to hold allowing Indian currency to catch up on the bad year past in 2012 and strengthen in the periods the Won and the Singapore Dollar create as they continue to run up past the US Dollar on continued good performance by Singapore and hopefully bad December trade data turning out to be a chimera for Korea whree the WON nearly ran up 10% on the Dollar in 2012 on trade resurgence but China may be looking to other trade partners at the beginning of the recovery while Korea has to wait for the consumer boom in China and its other Export markets.

Asia leads strongly in today’s open as Europe is also likely to rejoice on the postponing of all arguments in the US Senate and House for another two months as both Republicans and Democrats try to get a hold on their contribution to a longterm restructuring of the budget deficit.

Meanwhile LIC’s investment charter is likely on target to receive the policy endorsement needed to own up to 25% of a company in equity and the Indian state gets a strong ally in Institutional investors resulting to that.

Manufacturing PMI data to be released later in the day may not be able to hold on to its gains at last months near 54 performance and December’s lukewarm auto sales ( to be confirmed by Bajaj Auto and HMSI) with TaMo scoring just 15000 sales for the month and Maruti sticking around 80,000 vhicles for the year near its recent bottom for the year. Hyundai also reported sales of less than 30,000 for the month while M&M nearly topped off the 50,000 mark in a strong performance and its new SUV range indeed catchs on the fancy of the budget buyer, a big category in India’s consumernomics.

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