India Morning Report: And here we are 5850 and nary a huff puff break!

The early morning run for the Nifty has panned out really well, with the 5850 mark looking as enticing aas the hitherto 3800 mark(5600 from August) and no employment for traders yet again on the upswing or as now most would like to say in the week of consolidation after it ends the day after expiry without new brilliant moves of mathematical elasticity of direction brought about by Expected returns of each stock. algorithmic/Program trading however is different yet and with new regulation pon HFT preceding other countries’ attempt at controlling the HFT beast, Goldman Sachs trading rooms and that o f JP Morgan will continue to resemble SOHO offices trading the solitary Gilt in action.

The OMO scheduled as promised after a big break that definitely helps the cause at many ratings analysts’ desks is still required though for what would have been $3 B but is considerably depleted in Dollar terms . Similar problems with credit growth data also top up your and my morning cuppa as the absolute growth of INR 300-500 B every fortnight is now going to be a below par performance especially for one of Asia’s Top 5 equity markets of 2012 and probably the Top 3 in 2013 as Phils and Thailand are probably over the hill from all the buying un abated since china’;s slow poke began in an atmosphere of  European banks’ left with Asia as the only profitable franchise in 2010 and continuing through their liquidity squeeze on Asia and post the ne liquidity moves of 2012.

The Euro is king right now among currencies and that means the Gold and Silver tunder will be missing for some more time though buying has begun. China’s industrial demand for silver had thoughtfully started increasing this quarter but accordding to somenon conventional indicators china is still a long way away from a beneficial breeze starting to blowin new custom even as impports continue to rise optimistically keeping retail sales steady on month.

Back home in Mumbai, Bharti infratel IPO is finally up and running and seeming there is more clarity in the CDS market for insurance cmpanies as well which could be the leather for the leather hunt required in fixed /income markets to keep the comeback int he currency markets esp for those longer term rupee investors which have stuck around after banks withdrew fromtheir Bullish rupee positions just last quarter albeit a bit too soon. Despite market movers, I am not very fine with the move in Canara Bank or other PSU banks that are keeping the Banknifty abreast. Its pure sacrilege of the same variety that brought the house down last time. NMDC should be a good issue and good pricing will bring good treasury gains to banks supporting Divestment OFS issues like the one priced at 155 last fortnight

Mid-Day trading strategies August 02, 2012


If you are also quite done with the move down in the Nifty since morning, join the club. However, you should join the club only if you are putting money behind the Nifty now in the afternoon, because that is where the trade is consolidating, rupee predictably still threatening to move to 56 in spot and 56.20 in August

Union Bank results came today ( there are two UBI , Union and United, both are essentially smaller players fighting asset Q) and Speciality Restaurants reported INR 50 Crs mark in sale (49.7Crores) Its premium restaurants include Mainland China

Mid Caps are sneaking up in trade with MANAPPURAM, RENUKA and BALRAMPURCHINI with a lot of upside still left I quite like the Manappuram story with 16 lakh customers and more than $2 B in assets with a 60% margin

Bajaj Auto Sales are down to 308,000 but SL exports have resumed to 4500 units

Shorts are on in Union, United and CBI and Canara Bank but I would suggest to hold on to HDFCBANK and ICICIBANK right now and SBI may have completed the correction

M&M has signed a new JV for Defense equipment which could add large blocks of fresh revenue for M&M. Aviation has a good upmove left in Jet and Spicejet who have been both containing costs and the right sale and leaseback of assets could keep green growth profitable

Maruti is ripe for a down trade if you believe the shorts. The buys have gone by without a run in the morning session again but the afternoon should see one strong move to develop the later strategy on the short and mid term trend


The public bank conundrum – Canara Bank shows up a red tailed monkey?

Image by robynejay via Flickr

Profits seem below expectations at Rs 899 Crs or $225 mln esp as the expectation was a good 10% on the upside for NII, the Bank delivering less than $250 million even at 40 to the dollar, NIMs comparing with global peers in a far more unleveraged structure and NPAs rising despite spreads being almost static across the sector, the slow bear downhill is fast looking to break the ice in the lake..Welcome to bouts of snow in midday heat

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