India Morning Report: Markets consolidate to new 6350 range/top

Beijing subway

Beijing subway (Photo credit: doubleaf)

 

The IT correction of last week already got used into the 6200 mark as positive results keep positive momentum on global news for the Dollar backing off. As BGI (Blackrock) and Vanguard welcome back funds into Emerging markets US yields and Bond Funds may not get that much investor interest returning and markets like Korea and India should thus be beneficiaries in the ensuing inflows to ‘EMs’

 

Thus ‘uncomplexed’ the flow however is likely to still not be emboldened by the fears of an asset bubble in China as  further improvement of House prices by more than 15 and 16% in Beijing and Shanghai keeps China the easiest target for Hot money flows probably now getting more focus on to its fixed rate currency. Thus an unforeseen window for pressures n the currency though the currency-markets hedge is no longer holding and correlation between equities and currencies will be kept by the broader money flows of whatever magnitude

 

Metals are a good pick for Macquarie which is among the few doubling down on IT post results with the rupee at 61-62

 

YES Bank will likely bring back bigger and better position trades to the Banknifty which is right now sprawled between ‘PSU having been whacked too hard’ strategy and ‘Private banks being the only worth’ bidders who for some reason are getting shorted on ICICI Bank, the bank’s own dealers likely not to blame. ITC and ING Vysya will follow the lead of the banks as most select scrips in portfolios are not adding further positions otherwise except for further small window trades in the delta to the Top from here. Is more discussion on RWA arrangements in India possible because though instruments are merely traditional ones predominantly, Basel III treatment could possibly be more rigorous and Indian Banks are mostly getting a free ride except for the large move to NPAs which is limited to bad quality portfolios.  A Bank promoter for instance recently suggested he has only 3% Tier II Capital and 13-14% Tier I Capital which is true for this particular bank and showcases the thinking on Capital /Leverage in India and the potential for the banks to grow having come thus far in an untapped market and running at 3X the GDP in growth in lending if a little focus is maintained on bank governance

 

HDFC posted a perfect quarter except for the Bank dividend having already been distributed in the First quarter dipping the expected NII to a posted INR 18.14 Bln. The year on year growth is safe and sold loans constitute less than 10% of their outstanding book while still earning the bank 129 basis points. NIMs increase for the institution through the year and the first quarter’s 3.9% increased to 4.1% yesterday(as of September 2013)

 

The news of a fund crunch in Jet Airways or the CBI action thus far proceeding against KM Birla and other industrialists is likely to become the focus of the “Bad India, Dull India” news flow and may merit immediate policy action but overall market participants are well aware of the limitations of policy action from an outgoing government. FIPB was also postponed for day after tomorrow having approved INR 33 Bln worth almost a month ago.

 

 

 

 

 

 

 

 

 

 

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5 thoughts on “India Morning Report: Markets consolidate to new 6350 range/top

  1. Pingback: India Morning Report: No, yesterday’s mid-day rush was not enough!! | The India Investment Post (earlier india.advantages.us)

  2. Pingback: India Bank Earnings: A 20% rise in revenues for ICICI Bank, Asset quality upside not enough | The India Investment Post (earlier india.advantages.us)

  3. Pingback: India Morning Report: 6220, then, true bottom, market move up please. | The India Investment Post (earlier india.advantages.us)

  4. Pingback: India Morning Report: Pass around the peanuts :: Losing 6200 now(not really), I am sinking, No EMs aren’t a great buy or great “SELL” either | The India Investment Post (earlier india.advantages.us)

  5. Pingback: India Morning Report: A sudden rush for crossing 6350, nipped again | The India Investment Post (earlier india.advantages.us)

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