India Morning Report: Markets swing to international sentiment on India

Pivot table NSE Banknifty PSUBank index scrips...

Pivot table NSE Banknifty PSUBank index scrips from OJN for 20110609 (Photo credit: OJN2)

 

The proof of the pudding is in the eating. in the weakest correlation ever to its presence n the Global markets, as shared by global investors and markets that largely ignore Indian events already, with mirrors available in east Asia/turkey and even other developed economies, India itself typically stands alone and the imperceptible nod to trend shifts remains the only hint to international investors. again though the banking system has been asked to step up to tighter overnight liquidity yesterday with a 4% CRR now enforced daily instead of twice monthly(fortnightly not bi monthly) where earlier it was required to e 70% now it is 995 That would affect the base SLR stock too but with most in excess on SLR, banks would have additional motive to hawk those securities for others CRR requirements and a domestic mini bond sell off may yet be avoided if there is a real overnight liquidity crunch. Which there is not.

 

So the entire shortfall of INr 900 Bln pointed out as likely by analysts like UBS’  Bhanu may actually be a mirage for inter bank markets though interest rates will respond likewise the first shock of two weeks ago and a catch up to the 10% mark as the LAF is now available at 7.25% only for 0.5% of each bank’s NDTL. Thus this shortfall may take a whole 6-8 weeks in unhiding itself in the business and a rate hike may yet be unlikely though the range of choices before the RBI Governor is still not large and banks wee on the verge of easing down loan rates when the dollar/oil trap worked them into a corner

 

What that means for equities is that they are largely naffected as liquidity from interbank schemes and pledges shares has already been minimised. Also foreign flows stay in and increase slowly while letting the Rupee fall. I may be well describing a limitation of this monetary outreach here but no one would play that card to corner India though unwittingly FX flows be unconcerned and pressure maintained on the currency as dollar starts its climb back I still dont think IT sector is going to capitalise on this leg of the continuing rupee depreciation stance but yes those basing their investments on continuing wage hikes factored in will bring in the kudos for the sector always singled out as the flip side of a depreciating currency while exports remain ata standstill falling 5% in June

 

Markets may not dip further from the 5990 levels Is ee in late morning trading on the screens and the Banknifty dip is probably still just a check on how things pan out and north is the way to bet from today late afternoon. Sun pharma going back into currency or more HUL will still not preclude positive investing in Bharti, ITC, Yes, IDFC and iCICI Bank

 

 

 

9 thoughts on “India Morning Report: Markets swing to international sentiment on India

  1. Pingback: India Morning Report: The Apple does not fall too far from the tree | The India Investment Post (earlier india.advantages.us)

  2. Pingback: India Morning Report: The new series gets no welcome! | The India Investment Post (earlier india.advantages.us)

  3. Pingback: India Morning Report: Markets staying the course as US responds to GDP | The India Investment Post (earlier india.advantages.us)

  4. Pingback: India Morning Report: Sun Pharma finally breaks stride (ha! Stride Arcolabs wins) | The India Investment Post (earlier india.advantages.us)

  5. Pingback: India Morning Report: A dark light envelops India Markets as the longest tunnel is in play | The India Investment Post (earlier india.advantages.us)

  6. Pingback: India Morning Report: Thursday’s bounce engenders positive weekly closing | The India Investment Post (earlier india.advantages.us)

  7. Pingback: India Morning Report: My right shift key doesn’t work. Will the right UBS please step up! | The India Investment Post (earlier india.advantages.us)

  8. Pingback: This week in Asia: India Morning Report: The Rupee continues to not find the levels to be looking for ..My right shift key doesn’t work. Will the right UBS please step up! | The Banking and Strategy Initiative

  9. Pingback: India Morning Report: Historic Valuations, Trends disregarded as flows rush in | The India Investment Post (earlier india.advantages.us)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s