India Morning Report (July 11, 2012) : Indian markets upgraded again

Though yesterday’s rally broke thru key resistance levels at 5350 to ensure that more market participants plan for a 5600 and a 6000 level nifty, these new targets are not going to be hit overnight. Firm policy action from the Indian government has to be on the table and many put ‘investors’ are also safe during the day’s trades as Corporate india looks for economical ways to raise money internationally in debt and equity and MCX-SX runs with its ne approvals to set up a competing equity trading facility to compete with NSE. the Sensex is likely to be a first short term winner in the competition as analysts and brokerages /banks put the ranks up for international dissemination rather than , There once was a Sensex, which is still the most important Indian Ecofest

Longer term investors are back and new bank niorms though likely delayed from any immediate timelines people had in mind may continue to evolve based on comments. As I mentioned earlier , we would not mind new banks with INR 50 B in Capital , INR 25 B from /indian and INR 25B from Foreign investors but probably looking at a shortlist of investors, RBI was not encouraged. GAAR has alaso been put in place hopefully and Kotak will get don to divesting promoter stakes as and wwhen new banks actually shape up in response to the policy note with 25% rural branches

Indusind started a good run of confidence in the markets, and Derivatives rules bringing trading to Asia might also mean bigger volumes for Indian Private Banks 

Maruti and ITC , i.e .Auto and Consumer (Discretionary and Nondiscretionary) will be the other winners not just because of the unwinding of interest rates to rev repo interbank lending but also to more spending power in the pocket of consumers as they digest larger inflation

Telcos remain a sector of concern as they are unlikely to get rid of the 2g scam in a hurry and Corporate Honchos in India are certainly not the ones buying 750 Audis and BMWs each off the shelf every month. Diesel prices ill also rise, ultimately

 

 

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