India Morning Report: Bring it on, said the citizens to the grizzled

The palaver of a broken market ready to tip off uncertain highs is catching strength this time but the bulls still have it having technically exchanged stock weights skilfully as new funds were available everyday. of course none of it makes sense if no one believes in the recovery. All liquidity infusions are a case in point, belief driving the US engine out of the morass again and again

However the Banknifty breakout confirms the bull run beyond 6100. We need to understand that PNB results yesterday with Net NPAs quite creditable at 2.37% for such a behemoth. The most glaring misunderstanding of the Indian market still comes from Bharath Iyer’s team at JP Morgan and others at Bank of America and Credit Suisse desks as they maintain SELL/underweight on this behemoth which though PSU has still managed to weather the big NPA electric storms and is now helping Industry ski with abandon. Unwittingly, CLSA loosely modeled on the same state friendly structure in France, had a desk here rooting for PNB after results yesterday as the only one upgrading PNB but PNB underlines what it promised last quarter that it will definitely show up with green shoots on its assets this quarter aiding the expected India Inc led recoevry. also notably missing the point is those missing the come back equating PNB rising as the same as PSUs rising previously, more than a decade ago an epithet accorded to SBI. The correction in bogey PSU banks unable to come back is due and should exclude the UBI, the Canaras and the Syndicate banks even OBC and perhaps Federal and SIB on the private sector have not done enough inorganically to merit positive attention when wwannabe banks are available

Production data today could be led by another jump in Consumer durables and a not so wild cut in mining as we get into the trenches for a q2 GDP rush on the global markets . Korea still struggles with the weak yen induced failures as Korea and Australia sign on rate cuts and Korea adds liquidity to get jobs back in another novel rendition of mint printed liquidity

Australia ofcourse is in a double bind with imported inflation and no regional relations except for its customers in mainland China who don’t care much for the goods right now. Good shorts on the India markets come from understanding markets at 6400 and that underwrites that these last 300 points top off the nifty’s run for right now. Again, if the market remains slow and mostly steady from here, we have not heard the last from the bulls and it is definitely not a weakness as now markets are stable at higher volatility levels showing inherent confidence in the recovery.

 

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