India Morning Report: Energy Cos, FMCG follow into the bull segment in January

English: tata steel lake black and white effect
English: tata steel lake black and white effect (Photo credit: Wikipedia)

The news of breaking thru to better levels in the next segment have started crystallising on expiry day as OMCs and  Tata Global catch up while Aurobindo is a strong candidate to become the trader sentiment fundng stock as it battles the challenges from a local branch of the US FDA in its new avatar(US FDA’s new avatar)

Divis’ is another if you think it needs a scratch to win the Pharma segment in 2014. However there still is significant (75% +) investment upside in stocks like Cipla, Lupin and even Sun and Dr Reddy even as they review their competitiveness in the blue sky territory (Ashwini/ET on Aurobindo) for their stock prices.

Mining and Metals are not going to get a broad rally and may sustain bear interest but Tata Steel and a few others are definitely heading for a better future, Jindal Steel on the flip side continuing into the nether. IOC  and BPCL could be strong picks, HPCL having compensated for the lack of interest within the sector in 2012.

The long stretch at 6200  now sees thinning out PSU bank trades and new investors looking for the non Quantum broking “hidden gems” i.e. analysed not in this block of 5 years but surviving the negative glare other trader favorites have been subjected to as Bank and Dealer trading rooms get increasingly traded out of the select short list making the back bone of the as always overall positive prognostication for the Indian Markets as a steady uptrend of more than 15% gain in 2014 has been divined for the overall markets. 

However the FMCG jump backs identified in Talwalkars, and Jubilant or even real estate newbies in listed trade like Prestige or earlier RKJ picks NCC have already shown their limited stamina in such rallies and the same applies to a McLeod Russel or any other such Midcap picks and Tata Global will probably lead a pack of 6-10 such winners . Others likely to be included in such a cross section of winners would be the winning infra trade from IRB, Lanco and even the blue chp pick IDFC,  and another from GVK, GMR and Reliance Infra on better leverage news in 2014. The ones rejected for quitting on the bank licence race or just trying include Shriram Transport and LIC Housing. ITC and Bharti are not good for the day but remain part of this segment of winners to provide fairweight to sucha trending portfolio unlikely to be able to depend on Maruti or Axis Bank (probably just because it was tired by traders thru excessive lay in 2011 slurring it as a bulwark of the bada$$ trader instead of India’s flagship trade) Punjab National Bank alone is making up for the required breadth in Banknifty underlying/components along with the usual volumes in SBI. Seemingly, Powergrid is also nearing a FII limit at its current aproved 24% part of the overall sectoral limit.

The Power NBFCs are good for the rush, HDFC Bank is not out of favor and REC and PFC continue to lead this other mrket spine overall, but the other spine/splines(if you read) would come back in Powergrid and GAIL. As mentioned earlier the L&T and BHELs (esp the latter) or the metal and mining Hindalco and Hind Zinc may not provide such an alternate portfolio enough weight to survive the daily storm in 2014

Also, on the overall, like Reliance in the earlier years from 2005-2010, one should stay away from a Kingfisher like future looming for Tata Motors as cash gets reinvested at luxe rices into JLR and it is fully matted in domestic markets

 

India Morning Report: Powergrid 78 Crore shares on offer, LIC and IDFC better picks

A bond from the Dutch East India Company, dati...
A bond from the Dutch East India Company, dating from 7 November 1623, for the amount of 2,400 florins. (Photo credit: Wikipedia)

The Rupee in the meantime and the bond markets again showed up weaker to announce that India investors remain Hedge funds and non standard  investors ( read hot money) already exited commitments when day began (  on any day) even as the US taper possibilities receded ahead of Jobs data but bond investors sold out just to drive the point home to the US Fed as well, keeping their pressure on after being denied a just reward for having supported the Fed when they expected the taper to start in August – September. The Divestment program is likely to continue in Coal India/BHEL (5% on offer). The Oil swaps window has been closed by the RBI in light of required action being completed ( Second Quarter Q2 economic data near the end)

The quality of India investors in the offshore markets/or of the so called Foreign Institutional investors aside, Indian markets enjoyed remaining flat in the session up to 11 am (We try to make the India Morning Report before 9:45 on most days) and ahead of the European markets enjoying a year end surge of interest as US gets Holiday fever.

Powergrid seems to be well received though no data is available yet for the first of its three investor days. Retail investors can continue to apply on Friday. Post issue purchases in Powergrid are also likely to stack u despite institutions having saved up on trading in the stock for this week of buying, and one can accumulate the stock with excellent India business prospects. The additional 7.8bln shares men 1.9 mln new F&O lots in the NSE. In the US markets in derivatives in Chicago that would have been 78 mln new lots of F&O contracts possible on the available floating stock itself. F&O shorts in Powergrid and colgate currently are likely to peter out and are bullish with individual series’ like Glenmark that is powering ahead already

LIC Housing and IDFC have finally become part of hot pick baskets and infact one or both will be de rigour in all market portfolios including those with stock derivatives strategies as both are actively traded, value investors may still find game in the two that can really build up volumes in play to the period till at least June 2014 when they might lose the value tag eventually.

6250 seems to be a good mark for a breather and may even break the monotonic correlation with Currency and Bond markets allowing RBI to consider more options than a rate hike threat for markets governance. Auto sales reports were as disappointing as post Festival month readings could be with people also postponing purchase decisions to the new year in India and the CV/Truck segments crashing through compared to last year. Traders 20 scouring reveals good shoting skeet in NMDC, GMDC and TN Newsprint (ETNOW, Lancelot D Cunha, Rakesh Gandhi)

Stocks like Lupin and M&M fin also show restless investors in the trading tick showing south while Rel Cap and Rel Infra are back in the good books. As of now Tata Steel continues to just about outperform Tata Motors but soon it may be immaterial to play Tata Motors anyway as Global steel markets relax a vice like bear grip and stabilise with some Chinese Demand pushing up. Commodities including metals are also bottomed out as end of month Chinese data confirms a better November

Exports are stronger even as Domestic Auto markets slow but the winer would be Bajaj Auto and not Tata Motors from our vantage point. The wai for a mid-cap boom seems to coincide with other rtail traders entering markets

The Trade deficit for the quarter was an almost non existent with remittances helping the CAD to a low $5 Bln or 1.2% but the Rupee seems more under slag for equities which will continue to move up regardless. Rupee thus cannot be pushed down now either with full Oil demand in play. Q2 also saw Debt outflows at $5.7 Bln in the quarter though Equity inflows according to Bloomberg ( carrying the GOI press release) are upwards of $17 Bln

This may cler the way for the Rupee rally eventually as Exports showed up above $81 Bln this quarter and imports stayed under last year’s usurius figures of competin growth beating Exports additions as Gold imports remained virtually stopped at under $4 Bln in its biggest market, global rices continuing to hold $1245 marks. Indian trade deficit at an average of less than $12 Bln may see this as the botom in the years to curb when Gold import curbs would be lifted. That reduces the prospects of any Rupee rally

Also, though no affecting any listed stocks Unitech has completed asset transfer to Telenor for the uninor licenses according to reports

A news report (ET ) yesterday highlighted the change in investor tastes in Auto as Bajaj Auto has grown 6X times from 2008/9 while Hero enterprises has exited Honda and grown 1.5X times to now equalise at 800 levels. The pair trades if anyone dared in the initial period probably because of the changeover for Hero are still a fair trade for years to come as Bajaj comes out with a 20% + motorcycle share with much better margin stories. Hero has announced a new JV with Magneti Marelli

 

India Morning Report: Record low PCRs mean a bottom at 6000, Iranian Oil to be feted in markets

Goin' to Iran
Goin’ to Iran (Photo credit: Örlygur Hnefill)

The Nifty already ranged by puts and calls at 6000 and 6300 is likely to consolidate signs of moving up as the 6100 puts start looking good for a ramp. Despite the global cues, including an agreement with Iran, the market seems to show the Call writers have finally suffered from overconfidence for the second time on the trot this month and second time this rally after having been caught in October. The Rupee tantalisingly at 63 seems to be a factor too but Traders and  other market experts seem to have decided not to wait frther to buy into India. Citi’s MD, Mr Pankaj Vaish as much said so about institutional investors too on the weekend.

Even as Jindal Steel makes an exit from the Sensex, markets are finally separating the grain from the chaff, KArl Slym and JLR not helping the failing Tata Motors cause while Bulls continue in Tata Steel, probably widening th ga before the Ratan Tata vehicle Tata air and Air Asia get into the fight in 2014

As mentioned above, Nifty decided against trying further value levels aand opened around 6050.

Worth mentioning n fellow Network Analysts’ would e that despite the preponderence of buys that favor Bata and also repeat Tat Global, some have decidely loved the short on Bajaj Auto. Again Bajaj Auto was the genesis of the bbull trap last time around and Bears and shorts will pay heavily esp in derivatives for remaining short on what is likely the most of all bull trades in specific scrips in India after Pfizer and Wyeth as Banks remain on the back seat. In PSU bank picks to short too, TRaders 20 on both leading channels showed the kind of mistakes that can be made as BOI may not yield further in the short and a UCO Bannk may already be at the bottom after a year long short on the scrips, the last month rally in PSU banks (unfortunate) never reaching UCO Bank

If played along the ground in the sessions till Wednesday the markets may well try 6350 sooner than later before Friday close, but shorts digging in at this high concentration seems to me an isolated uncorrelated event worth researching as the US VIX on the other side rules at all time lows in low double digits and ready to try new levels ona new high from last week.

Good news for Axis Bank as it enters the Sensex 30 by December 23. If Banks do respond to that as  a secular class, despite Axis Bank hit on the FII ceiling of 49%, it will not be a big trend to ride but a one off, as the Fitch/Moody’s restatement of NPA woes is a twist anyone following pSU banks was having a hard time swallowing and markets were eagerly waiting for a turnaround in Q2 results let alone letting the slide be ignored in the DEcember and March quarters as provisions likely shoot up

IDFC and LIC Housing Finance seem to be walking away with the cake and short term traders continue to ignore a wonderful opportunity as investos stock up on both playersI would back picks on All Bank and Andhra Bank apart from the return to weight for PNB and BOI as ICICI Bank comes back to 1050 levels i n morning trades

Gold’s probably going back to 27k levels if not 25.5 (‘000 per 10 g) and if Fixed Income yields spin back to below 8.5% aided by the exit of trades on the older benchmark, things would get smoother for cash equities and the December series. Polling is underway today and counting would unlikely bring any shocks next week. Bank nifty would be stuck at 11,000. Oil prices will continue south after the Iran deal for 6 months makes arrangement for Iranian repatriation of oil profits, oil sales and humanitarian trade i.e. export of food and medicine among others to the India favorite (trade terms)

 

India Morning Report: A sudden rush for crossing 6350, nipped again

Corus trein 823 Tata Steel train
Corus trein 823 Tata Steel train (Photo credit: Wikipedia)

The Banking system’s woes are fresh wounds , blisters nary a bluster with NPAs at most PSU banks except BOI and PNB likely to cross 5% on Net level. Despite market’s favour for State Bank vintage in equity markets , the SBI scrip may provide most fuel for the Domestic Institutions who prejudicedly also treat the scrip as the holy grail along with operators. As we noted earlier within this fortnight, the results showing bolstered by reduced provisions for banks generating PAT growth mid year is a mirage.

Apart from the fact that NPA and AFS loss impacts have been spread over the remaining two quarters to March 2014, provisioning may be updated one shot by FY14 at all such banks and as yields continue above 9% the results will speak for themselves.

However, that is not the reason to be bearish at 6200 levels, neither is the bluster on ITC and Tata Steel by Network analysts likely to bring markets back to last week’s 6000 levels again. ITC is a good trade and Tata Global and Tata Steel seem to be capped for now. AS expected, YES BBank has moved on trading supports and IDFC is also maintaining 108 levels instead of 100 a week ago

Results from Sun Pharma last week, though not the digital upstarts like Sun Tv (SpiceJet) and Dish TV (reported today) are likely tobring rosiness back to the markets. One winner as markets tie of the Maruti move at 1700 levels will be Biocon, both scrips from disparate sectors, especially found in favor in Institutional and ALt trades looking for the India  Shining flavor along with the alpha ( which undoubtedly is missing in both stories) However a rerating further upward is likely only for Sun Pharma, having posted 58% growth on last September and having grown some claws at long last in the Indian Domestic market and margins of 33% (ex-Protonix) are good for the mile. Six month FY 14 EBITDA margins are a healthy 44% and the stock can well bring Cipla and the Midcaps out as well into more international baskets. R&D spend is likely to increase in the Indian markets in the short to medium term but current provisions, reasonable as % of sales are not good for a longer brush in the generics and domestic markets. A lot of those investments across the rest of the industry are likely lost in Process repair having been cut by FDA riding them even as Brownfield investments in the quarter exceeded $1.1 Bln and guidelines have been further revised allowing more such investment again.

India Morning Report: State Bank and Maruti not the best indicators for India Inc

State Bank of India was feted for its increasing NPAs as fresh additions stoppd at a huge INR 80 Bln instead of INR134 Bln in the linked quarter and again markets celebrate banks that fail to provision correctly, while punishing the good PNB for the same. I would switch that PSU bank trade to PNB and take some of the Satte Bank trade as well. Meanwhile after a good ‘pakao’ hour with ASK, Emkay(KK) did well in its 5 minute bits of glory on ET Now as they pointed out to a few good picks a nd a flagging MAruti. We eblieve too, the December quarter would be a big shocker for those putting faith in Maruti as it posted a 295% rise in PAT on the Yen trade in the quarter just closed

Markets could be closed for Muharram tomorrow. The coming Winter session of Parliament will again get washed out in the coalition of noise. Cipla earnings erformance as usual gets lost in it being the funding trade for the market back in the bull sights

Sachin smiling
Sachin smiling (Photo credit: Wikipedia)

Natco pulls off second court upset for Pharma

Natco Pharma scored again in courts, this time against a gag order requested by Teva Pharma for a generic of Copaxone, the appeals court upholding the ruling which ensures the Teva patent expires in 2014. Taro’s contribution for the quarter in the meantime was nothing to be scoffed at, and even as SPARC takes off without Taro and Pfizer contribution, Sun Pharma reports later today. Naco also makes Nexavar, a drug patent denied to Bayer in India under the compulsory licensing regime for 3% of the cost charged by Bayer.

ONGC may pay off Oil swaps in Rupees

Rajan (RGR) in the meantime talked the Rupee Swaps into Rupee as payment currency again and the Rupee is obviously back up below 63 levels. The Fixed Income markets also saw welcome buying but the rate hike is coming as any move above the 7.50% pre October was bound to trigger. I still think the MSF channel could have been 100 basis points without raising Repo rates and with Exernal debt being an overhnga nd domestic debt unlikely choice of Corporate Treasuries used to world class Cash management and Treasury Bankers, India Inc growth is tweezed harder from this rate creep

Sachin in 200th Test appearance

The Sachin 200th Test begins today with West Indies being ut in to bat and the last of India’s renowned Mumbaikars taking the crease at home near Shivaji Park where both Sunil Gavaskar and Sachin Tendulkar learnt their Cricket. The game has also changed tremendously in these years an Sachin will continue in a key role with Nita Ambani in the Mumbai Indians

Meanwhile the KG D6 row has granted Reliance a reprieve in that the 20% left with the firm is being reported the most lucrative and thus market will expect a quick turnaround on that 50 MMSCMD mark promise being touted in the whispers

WOTD: Tata Steel shines in Gold Earnings season, Banks shine 

Tata Steel , however was definitely the shining star even as Banks make a comeback led by State Bank and PNB and ICICI Bank on cue from 1000 levels. As SS pointed out on TV18(CNBC), Axis is definitely in the stars during midafternoon trading. YES Bank and IDFC remain on BUY lists importantly for those willing to invest for the coming 6 month bang

Tata Steel was rerated up at most brokerages, Deutsche Bank taking the cudgels for a push to 525, as the sector rerating turned into real numbers at the Steel presser. Arcelor Mittal remains subdued on European market woes but Tata Steel doubled Gross Margns with rices picking up in China and SE Asia as also domestic demand pick up form Automobiles. Steel prices in the US have firmed up and Tata Steel scored a year on year 20% growth including NAT steel in Thailand when global markets for steel grew by a robust under 5% score at 4.7%. rice realisations apart, Steel markets also favor diversified roducers like Ttata Steel for the value added flat and rolled product ranges they can produce. Apart from new flat capacity added this year the producer will also e adding capacities in Orissa in 2014 while competitors like Jindal and the erstwhile Ruia behemoth stay busy in Crude Steel volumes

Manappuram Flash Earnings Q2  FY14

Markets may go all the way to 6300 in this uptick but are unlikely to go north of that mark as results for which ever camp from state elections, murky up the coming khichdi government prospects for India to ride into the 20s

Power NBFC results yesterday were in the expected direction with 30% increase in Topline while Gold NBFC Muthoot reported a Flat quarter last week. Manaappuram reported a 11.78% margin again this quarter, o fresh disbursements of INR 50 Bln but NII significantly cut back to INR 2.5 Bln this quarter. The IIP hoo haa turned out to be a damp suib despite a 8% growth in the Core 38% as the IIP for September was a slow improvement to 2% even as the Electricity sector was back with a bang as Durables joined Cap Goods in along drawn ‘winter’ of demand led production.

One would have thought that should have seen higher Gold Loan volumes but apparently the Gold consumers are able to hold on to their holdings despite a poor economy prognostication as Gold prices remain subdued in a CAD challenged year. Global Gold prices are still headed south from last week’s 1280 levels

India Morning Report: Everything is alive and some more are back in play

An unusually late report from our end again, but the markets continued flat after having a scar Friday afternoon closing at 6080. The markets traded closer to 6100 in the entire session and the yields again turned back up to higher than 9%

and the Rupee stabilised at 63.5 levels. Any move int he Rupee above 64 is as good as the other breaks markets are looking at and the Rupee wll in that case skid till it hurts around 69-70

The month’s IIP data reports are apparently still awaited at this long hour and markets have been trading better consoled by the slowing down taper jitters and getting used to the “NO BUY” mode at DIIs and Funds. Power NBFCs have more or less completed the rally with REC moving into 220 levels while the cuts on ICICI(1010) and ITC(310) are also probably done with equity shorting again replaced by buy index hedges in this Short trade attempt.

“Pre-emptive Open” sessions on the Nifty saw the markets trying to guess at low levels for almost every other scrip and the muscle contest was a no show as Emerging market ETFs may be out of inflows too soon in the series but it is unlikely that they will actually see outflows or even if Fixed Income asset classes get more attractive than equities it will not see any equity flows jeopardised by the same desie any attempt to rationalise a link between the two markets

Mauritius and Cyprus being targeted by  India does ht hot mone yflows and in fact probably bodes well for the REvenue Department hose hands are tied especially as they already tried an illadvised reetroactive taxaion of deals like Vodafone, from an era when FDI rules were much more amorphous than today

Tata Steel may see profit taking but that and SESA Sterlite have reported true to form fgood results and with disparate sectors reporting today from Hindalco to MindTree and Reliance Infrastructue who has turned around on their Power revenues woes with Multi year tariff agreements the rally can move around a variety of sectors without paucity of defensives and without a tight upper limit or short duration limits on BUY trades

Seriously, a little gold buying or the returning of Oil demand is not a cause for a BEAR traded on these unvdervalued markets a s long as you have the money to sit and sip a cupa instead of fliing it too fast and creating positive notes on the VIX. One expects a dip in OI also as the short positions exit during this week and the F&O series will probably see more robust trading when such exits have been completed, more probably for next Monday

 

India Morning Report: Pass around the peanuts :: Losing 6200 now(not really), I am sinking, No EMs aren’t a great buy or great “SELL” either

corus / Tata steel IJmuiden velsen beverwijk
corus / Tata steel IJmuiden velsen beverwijk (Photo credit: Wikipedia)

Choosing a daily headline is a challenge, quite so. Instead of helping and supporting you are acting like a pack of chihuahuas who have been given more than enough to eat . Write back on every post , this kind of reticent observation posts on my writing are not helping your cause (Dear Readers)

The Sun Group results, mostly Spicejet, tchah why would i call that or the iPhone launch a headline in any subdivision of this country let alone online with so many obervers, NRO accounts and eligible bachelorettes. That’s another franchise down the drainpipes. (gutterball, say!) I am not talking IPL though Sunrisers also went down rather for the same mismanagement.

Debt worries may have more to do with Spicejet losses, I would hve said on a cursory glance, so I leave that one to you . I am probably wrong as Bad Debt is definitely not my worry till I am operationally efficient and thus viable again. The entire new industry of innovation relies more on such mis-accidents and so any bank with an innovative model though feted by the markets would continue to go down in the melee and PSUs are not required to instead encourage losing sectors for Export

Each “Quimvadanti” above is a torture for any reader without ad libbing the rejoinder mind you

EM analysts are right that EMs have been scoring negatives thru 2013 and that the same will be recompensed without a Bull run though. However, India is getting inflows thru November and the so called funding trades are now just shorting down a blind alley every time for the heck of it as retail and DIIs stay away from buying. Portfolio buyers are alerady selecting known performers.

JSW Steel production counts are up to 12 MT for Crude Steel but I think the ratio of value added products , at less than 10% that in each variety ( 1 MT ea for 4-5 product “SKUs”) show the limited potential despite the use of advanced technologies in these traditional EM sectors where India does score over the more volatile China, Russia and Brazil. Rio Tinto had to recently leave after a small project to review the potential of Diamond mining among others and POSCO / Mittal have been exiting the Orissa wilderness, but the so called Economic loss may well be a gain. BPO lays claim in the mean time to furthering urbanisation as Tier 2 players post out their Top talent to the 30 odd 1 mln pop towns .

UB, according to ET, has lost 20% of volumes in TN also even as Fosters and Carlsberg move up in alcohol markets in the North. Beer and Whisy markets have plateaued in India again despite a crisis in the last 5 years , an early maturity we have long commented on , in India’s branded Consumer Staples (Discretionary) United Spirits is an easy sell though any pick on news is unlikely to last till Monday close and open positions over the weekend should be avoided, easy pickings for alt Asset cronies stymied for hedges and funding on a flat index

SELL on Private Banks like YES and Indusind or ICICI Bank (Traders 20) will fail again as the banking sector carries the seed for a lot of outperformance out ahead that India guarantees. Credit growth cycles need not renew as they are already back in India at 18% and longer term impacts in East Asia and Singapore are unlikely to trump local Indian growth in the sector as again it guarantees credit growth without the Europeans . Draghi’s rate cut though deserves a mention and the Euro has returned to growth again rapidly losing 1.38 odd levels to end at 1.33 before today’s London open. The London FX probe primarily started around the EUR-GBP cross trade ‘fixed’ by leading banks as sort of a ‘tradition’ as all global banks get busy in another imbroglio obviating the need to explain their non return to Asia.

Muthoot results boast of 620,000 gold accounts even as Gold Assets obviously went down in a bad year for Gold. Consumer recession or inflation impacts would have seen a spike in these assets held as collateral by the bank hopeful

JLR volumes up 32% are but a drop in the Ocean but any uptick post-results will impact Tata Steel holdings till Reliance results come around at least. Hold and add to Tata Steel positions

Siddharth Tewaris appointment is welcome for at least the continuity in policy it guarantees and one in fact hopes that RGR’s futher appointment as Governor indeed sets a precedent , a steping stone as CEA very visible to critics and friends and allowing a testing period for future governors and more importantly a cogent monetary policy

 

India Morning Report: A post festival dawn, markets churning sector and memes

corus / Tata steel IJmuiden velsen beverwijk
corus / Tata steel IJmuiden velsen beverwijk (Photo credit: Wikipedia)

The Goldman spiel actually are quite a Venus flytrap “MODI-fying” India targets to 6900 on the Nifty as it wanted. However, markets haven’t really closed around any specifics except the “Investment dozen” which could include ICICI Bank and YES with IDFC and ITC among others. however the morning rush of re open advertorials on the networks today, especially saw me frowning a lot at ASK’s shallow commentary on ETNow, and even Sukhani got caught in the vortex of sellling Tata Steel and /Buying Tata Motors ( ineffectual, near total failure in India) as SS tried to look for a deeper correction.

** The investment dozen is our(mine) selection and does not match the broker , Goldman Sachs as reported in TOI/ET/other Bennet coleman properties

On the other side, Cognizant results , till now shackled in their being listed in the US only, were being feted by the market’s unholy trinity in bull spats on the HCL Tech and even “Wipro” counters, showing the day had not only been bought in by the Bulls, the correction strategy was completed midway thru closing trades yesterday before 3 pm and the day is trending in the positive again. Apart from that trading hint, I also have to let you in on the secret that market volumes are still going to be building up till after the Superbowl in the US when all yearly earnings will be over and EM flows will be in focus again. However Q4 inflows will be dominated by Emerging Markets and China is in play again so India will get its due but nary else, romantic fund managers like PIMCO, the Fink or even George Soros being in short supply and having already decided on India a while ago in 2009. One ears Madison Square Garden is a little silent today but its a long way from being a new advertising strategy for Indiaphiles or Global market conversations involving authors. AMBIT is hardly a help , ET Now perhaps looks at shining at this plateau and ceding a little back to moneycontrol/CNBC18 again.

Metals are indeed in the bull ring and contrary to those still waiting for outperformance in results before the stock selection, the metal rush is on. India PMI and Services PMI crawled back to 47 levels this October and china again reported an expansion in the Economy. Singapore is doing well despite curb on overseas investments by Chinese dominating that flow.

New Banks will be a new story in this new year though most will be reusing attempted model plans from 1995, including rural distribution and Home finance or FX and structured Finance with increasing/exclusive attention on derivatives to spin risk into profit and out the door again for more business.

Sells on Bajaj Auto(Ashwini G)  or Tata Steel(SS Investments/Trading) are contraindicated and those on failed PSU banks still accepting deposits and making credit a funny way to establish anyfaith in India stories. There are very few Bank of India stories out there

To reiterate this market was quite done with the correction at 6250, and seeing that it is flow led, it is likely to push forward faster and probably YES and IDFC are better single cash trading picks or Bajaj Auto and ICICI Bank or HDFC Bank pair trades. Bharti and ITC should be investment portfolio stories throughout the remaining December quarter and till June 2014

Petronet LNG(SS) and Tata Global(Trader20) seem to be good mid market picks though overall I maintain idcas will be ignored in this stock selection spree which will still see some victims . 300% Onion inflation is of course an election gimmick and stays one as monsoons create a win win for India Inc

India Morning Report: Nifty treads lightly as shorts disappear (Priced to 6300+ levels )

English: The West stand of the Tata Steel Stadium.
English: The West stand of the Tata Steel Stadium. (Photo credit: Wikipedia)

Monday saw 6100 losing the pins as markets drew interest from investors on good Reliance results. TCS follows. IT and Pharma  outperforming expectations similarily throughout will probably see that elusive 6400 mark to set a new Nifty record it at least seems improbably probable.  Short hedges should move up to 6600 and 68-6900 levels this week or next.  The 6300 call continues to see increasing prospects of a devolving positions as the short trade exits the market. Tata Motors, Tata Steel and Idea may remain strong except for funding trades to enter short profit positions in results calendar Private Banks remain dull as the higher interest regime and larger account restructuring news and its containment are both seen as  insufficient and unresolved.

As i write, Indusind is reporting a 37% jump in NII., largely from retail yields as NPAs were contained with market borrowings helped the profits. The cost of deposits if an issue is also likely to nettle the smaller candidates as th month’s bank policy confirms continue the higher interest rate regime.

The 6200 market will likely be reached except for a sharp negative news trend with less than 4-5% probability and will continue with IT and Pharma keeping “beat expectations” premium and Metals incl Hindalco and Tata Steel or the M&M picks counting for more buying and thus volumes of trade as the scrips also need  boost in liquidity. IDFC and YES, or Bharti, ITC and Bajaj Auto will spring any consolidated market moves. ICICI Bank is finally consolidating to positive marks and Bank Nifty may se a change of the flatlined visage before the end of the week but still unlikely.

10 year yields have hit the 8.65% level but this might just be an aberration as new securities get hocked on Friday with the 10 year adding INR 70 Bln

 

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