India Morning Report: No CRR cuts did not cause inflation, what about these 50% growth in topline and bottomline..

Is there a way to improve the “weights” of positive results on Bank Policy Tuesday? Colgate for example grew Sales and Profits jumped nearly 50%, Biocon Sales are better by 18% on year though they failed to meet any profit growth expectations and even BHEL which pictured a dismal quarter early on but masked it with growing Power business scream out for more attention in the Chidu vs RBI date we look ahead to.

No, there’s no President Pranab intervention on the horizon and even Chidambaram would not mind if the governor lets it be. The CRR cut may also ease the current low liquidity deficit of INR 0.60 T with another INR 10k – 20k Crs or INR100-200B released on the cut announcement.

The Risk reward has enticed the shorts as we suggested it might but we still think that given the inflows this year were of a couple of orders of magnitude higher and targeted Equities per se as commodities spin out of control to the bottom of the pool, it is unlikely that shorts in anything other than the whiplash mid morning. Banknifty is such a plump target the whiplash alone could cost it a Double century and bring it back only by the day end. However, if you were buying today the odds ( and not the long odds only) are that you would be in the money on 8 out of 10 bets ith a little patience, what you would otherwise employ with a green thumb on a falling knioves kind of a day in the bazaar.

Coal gate in the meantime ( the American strain) could not ruffle Obama out of that battle state of Ohio and Romney is still looking in Wisconsin even as Florida and most of the Eastern seaboard float ( probably in an attempt to shore up Oil prices) and even in light of record inventories of Crude and gasoline, it has meant a green light for Oil bulls after a long time, again, apparently my threshold still says that Oil is likely to continue to crash despite. Festival buying of Gold is almost over and the disaster has brought up prices too and a bull run in Gold will start from here as the yellow metal can outlast thru equities bull cycles as well in an upturn and need not signal a downturn in equities.

Nifty Put Call ratio is still a healthy low at 1.10 and has a long way to go as shorts extend into 5700 calls after the initial interest in 5800 calls giving way to more focussed pressure on the Indian system