India Morning Report: If you are worried about India Inc and your future together..

..this could be the right time to take a look at the Capital Markets bandwagon
Ofcourse, you would expect other intermediaries to also time such a bottom at 5500 in a naive sort of way for new fresh marketing spiel but India inc is rolling downhill and its just that some Consumer discretionary companies would be coming out of the last four year’s troubles with a consistently low core inflation. It’s confusing for most economic indicators as they have quite bottomed out and would stably point to a recovery but more so the production and the services that would need to lead the recovery are going to be battling the high interest rate economy as intervention has already been maximised and in fact is quite ‘over the hill’ for expectations of transmission to ground would be belied by yields moving higher in the uncertain scenario.

While Indian PMI, in line with global indicators points to a sharp 4 digit cut this month belying expectations of forecasters and planners, the idle production lines may not hit consumption if inflation remains low and the consumption sectors itself balance the struggle of the magic to catch up with interest rates and run higher consumption. Sugar decontrol and better off season flying performance spurred no doubt by free flying to Singapore and Kuala lumpur may be some such factors for consumption demand as well. Auto numbers down on a year on year basis are the most dire warning in such optimistic halucigenic prognostication yet consistent FII inflows and foreign investment could very well keep it going as India’s data remains the only isle of prosperity in the global ocean and recession strikes thrice even in larger economies of UK and Europe

The first few results from Japan’s monetary thrust could be the other news to look for and China’s broken models could turn to be a few smaller yet new and bright cornices of the India and SE Asia growth stories as ne governance models and priorities take their toll on the magic story of execution and skill. However, for both those who nurse stories of China’s super consumption future and its death over better models elsewhere in Asia specifically India, there may be shocks around the corner that help develop a real gameplan for a new post crisis world, in which China’s trade volumes and lack of OECD forbearance really tie in with tenable investments and thought leadership from India and USA

Its better to remain circumspect about IT world recovery for the time being and Infosys would probably see a sharper Thursday fall as it unfortunately tries to hang on to seemingly too high levels for its current performance at 2800 and would likely see a longish period around 2500 later in the month/year.

Emerging Market ETF outflows will continue in small measures through the hot summer but the original stock directed to emerging markets including monies that has already weighted returns and chosen EMs in asset allocation to 4-5% compared to stocks of Capital headed for munis and recovering high yield markets will remain in Emerging markets China being the most important target of money being withdrawn currently

Indian domestic pharma could be the revaluation story in the next 2-3 months riding on optimism about breakthroughs in domestic volumes. Power NBFCs similarily could step up to the plate as trend leaders as infra and banking support the rally likely a more staggered one which could lead to downward revaluation of levels but not before underperformance is seen in the next six months per se.

Indian rupee for example could shore up under 55 levels even in a sell off and recover on trade data improving from its worst performance in 6 decades.

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