India Morning Report: The Question is if the Rupee has bottomed out

Full bloom
Full bloom (Photo credit: Wikipedia)

 

By all visible indicators of technicals, as can be seen in a shallow traded currency, the Rupee has bottomed out before hitting 63 levels after a sellfest/beatdown on Tuesday. There was no edition of the India Morning Report yesterday, but he essentials of the currency , awaiting selling pressure to find out sustainable levels, are that it will look for another step in its recovery after a potentially false decline in value since the Fed pronouncements in May.

 

 

 

Yet, we have noted that the Rupee seldom responds to Global up moves, like caused by the current global lowering of Oil price targets with any substantive moves without buyers in the currency. The Rupee thus will go back to 61 levels only from here. IF the Rupee does move back that brings blue chips and banks selling at value back in the limelight.

 

 

 

The equities moved north yesterday till they corrected mid-session and today’s move essentially will be another recovery towards 5950 levels and beyond though one is not sure that will just help F&O bulls unwind from sold puts to leave the September series wide open or bring back the bulls which is likely if the currency recovery gains steam in the afternoon. Crude has fallen further to 103 levels overnight and Brent is close to 106 levels as peace talks resume with Iran

 

Unfortunately without a catch up from banks esp the Private sector Banks, the return  of buyers into the market is now more or less questionable and that is one of the two or three big waiting games developing in market circles.

Lupin’s new deal in the USA seems oto be a sales and marketing arrangement that adds directly to the topline. Its mainline US market drug Antara has just gone generic and the company seems happy it has recovered lost sales on that front

 

 

 

Discussions on the Tata Motors’ domestc valuation being recovered by JLR $12 Bln valuation escaped some of my notice ut overall, Telco has hardly shown any change despite the blatant push in sentiment by buyers. Tata Steel remains a much better buy for 2014. In commodities, Dr Copper follows Oil south on the charts as the return of China’s production led demand fails  to rejuvenaate the sentiment as expected by us.

 

 

 

 

 

 

 

India Morning Report: A dark light envelops India Markets as the longest tunnel is in play

The New Sea Link
The New Sea Link (Photo credit: Prashant Menon)

There is a light at the end of the tunnel. After all Sun Pharma has retraced to 425 and Ashwini Gujral is recommending a short on Axis Bank, with the Axis Bank bulls freely shorting probably the naked shorts that make up a new residual market of speculators as PCRs stay in a lower range with FIIs not adding more short hedges.

VIX India is having fun at everyone’s expense getting back at markets for being called bad all over and staying increasingly bad. The Morning has already see the rupee enter the new range box between 64 to 68 and so it is unlikely that it will recover to 62.50 or that this is the last stage of the capitulation move.

But yet the new negative momentum in the indices is looking to close out this move in this week itself with a $100 Bln exit by FIIs on Friday necessitating a grave distance covered on Monday and now on Tuesday the same is likely. That means the indices could well compete with double digit yields targets on 10 year paper and the currency targets ( if any) to hit 5000 by Friday close and provide a respite week next week.

JP Associates and infracos have not started back and private exchanges and therefore promoters linked to that may not yet ever make positive lists again

I am like a kid, hoping the Banknifty cut today means the Reserve Bank has thrown the banks out to the wolves asking them to mark all holdings to market and push out a mandatory minimum to AFS portfolios. But then there are those that still think below 8 yields will be back

Buy Power NBFCs and Bajaj Auto has also finished its last moves. LIC Housing for one other NBFC can probably not move down after it hits 130 levels

Vidyasagar Setu, commonly known as the Second ...
Vidyasagar Setu, commonly known as the Second Hooghly Bridge or Second Howrah Bridge, is a bridge over the Hooghly River in West Bengal, India. It links the cities of Howrah and Kolkata. The bridge is a toll bridge. It is one of the longest bridges of multi Cable-stayed type in India and one of the longest in Asia. (Photo credit: Wikipedia)

India Morning Report: Is that the big breakthrough to All time highs?

Questions of consolidation have changed to ways of finnagling the new target for Nifty though Domestic institutions keep selling as on Tuesday and not many found reason to miss the India Morning Report yesterdayas we probably cowered by the repeating of underperforming by ICICI Bank to expectations today decided to skip the report 9 strictly for personal reasons but no one would believe me)

ICICI Bank has also not outperformed though it belongs to a sector where PNB has managed to underscore recovery with jumpo profit growth and profits of INR 13 bln on NII of INR 37 bln ICICI Bank would likely out score  them by Q4 itself in NII terms and did by no means perform badly though PNB’s beating estimates is finally carrying the banknifty into tomorrow’s new series. Expectations of high volumes in F&O expiry are likely to come to pass as TV18 yesterday itself reported a 44% rollover in Nifty futures into the February series.

The first 6300 targets from domestic broking houses have sneaked in and we are thinking more in terms of markets managing expectations as necessary without losing 6000 or 6100 in the Feb or next series and then steaming past 6600 is likely the plan but each is more defensive than the rest and it will be our recommendation too.

For one, policy execution has not improved, another, people could actually believe and wait for an up rating of the sovereign in the background of the current roadshows by the FinMin and thirdly the main perpetrators of missing NPAs coming back to bad debt like Allahabad Bank will be reporting pretty bad numbers as All bank reports today a 40% decline in Net yoy to INR 3 bln

Important reasons otherwise for keeping expectations hedged would include the importance of having a welfare budget for Chids’ Rahul and congress (UPA) and NaMo’s ‘threat’ to quietly come over to the center and rule which would likely spark off an important after reaction in India despite India Inc protestations of support with industry in Gujarat likely to be seen as a big positive for his candidature

ICICI Bank has reported a better NIM of 3.07% improving by 7 bp over last year and also sequentially keeping its new NIM targets alive and might even guide much better ranges Chanda Kochchar has hinted at in the last 3-4 quarters

 

Late Morning trading strategies India July 18, 2012

Tata Global, Torrent Pharma and Dabur also report on Monday and are hot for a pre results upmove. (Torrent Power is the bad boy and may drag torr Pharma only later)

If you know Merck and Container corp they could actually be post results movers.. again results are slated monday and Tuesday Merck has alrdy been moving up but unlike others may not have abig level.

Dabur
Dabur (Photo credit: Wikipedia)

Page Industries reports Tuesday and should be continuing strength or that stock becomes an old story long gone

Zee News and Zee Entertainment report separately, DNA reports under Zee News

BAJAJFINSERV ist the big mover and offers intraday score. LIC HOUSING should jump further to even 277 for a sell on Reults next week. ING, YES and KOTAK wait for a move from kotak’s results tomorrow.

COALINDIA is hunkering up and 360 is today;’s level regardless of Nifty ‘s direction. I am worried about the market because of Reliance results looming tomorrow but despite expected beaten margins in Oil refining , Singapore itself at $5 [pper barrel, the scrip seems to be set for an intraday move up .

In sum, get long in ICICI BANKA nd IDFC, run with AXISBANK ont the rebound, and if youare invested in Merck thenthat should be enough but  otherwise Bajaj Finserv and Tata Global are set for the bigger pop.

GMR and JP ASSOCIATES could outperform as once he infra run starts in the afternoon. BAJAJ AUTO will  move up on results as 1433 is its lowest price levels, if dumped it could go down now to 1200 levels.

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