India Morning Report: New government’s initial prognosis is positive

Infy of course will provide an insightful opportunity to buy below 3000 levels as BG Srinivas exit follows others lst month, a proverbial straw on the camels back and the proof of the pudding is in the eating, with sell calls on Infy making it prudent to not rush into buying till the afternoon session and maybe all of this week as selling pressure continues in it.

Expiry day will see ranged trades and the Nifty is tied into an upper trade from 7300 in the new series led by infra NBFCs and Banks holding mildly positive with SBI shod into big trades up on specific announcements

As we mentioned this week, IDFC will be active, and the stock is fairly active in F&O so option plays will have a nice time betting it again to 150 levels in cash and further later to at least 160 levels. Bajaj Auto trade is indeed positive contributing to torsion on Heromoto but that gap will be sustained at today’s / this week’s best levels. The positive trade in PNB is back but we do not recommend following it as it becomes a short candidate risking the sectoral and market wide long trend near 1000 levels.

The morning downtick is probably led by Infy and will be filled by others  with Heromoto also falling through on expected lines. However on the downside for the indices the next level is 7100 and DIIs and even other participants who recently took real profits will brave it out to get good buying levels. Also as already mentioned last week, IOC is leading the way back up after the push on energuy stocks at last month’s highs

Bharti and ITC are longs, as is YES BANK returning after two weeks of profit taking with ICICI Bank holding levels before others mark out a definite trade Pharma scrips remain buying opportunities along lines outlined this week. SS is confirmed as again being in sync with all the moves on CNBC tv18 backing a sub 3000 infy and Bharti. Also, in the meantime HDFC Bank has recovered trading interest , ruling at 830 levels and positive trade likely this month again. Kotak in reserve on a similar policy announcement trade with FII limit trades actually making the sector uninteresting for markets which the trade predilections should watch for.

Page industries has recovered some speculative interest and that is a good sign for the markets overall making a post Infy reaction rally likely early next week.

Sun Pharma earnings would be critical to the stock’s health in this rally and BEML seems like a great candidate once again unless the government is in a position to pick and choose int he sector. In private infra plays, Adani still seems the only secular positive added to buy lists. Divis Lab trade is apparently affected by Sun Pharma results as well in speculative plays extending their disposition to strong-arm cartels in the market

Update at 12pm: The swish swoosh Horseshoe Casinos have benefited from the BJP’s entry at the Centre as it bans casinos and excludes locals at Parrikar’s levels ( from an earlier decision) allowing Delta to breathe easy on its existing business despite the cancellation of Horseshoe License. In both cases wires are setting free what are undoubted black pockmarked insider trades on the assymetrical flow of information on rule changes as opposed to the subject matter of assymetric information typically understood in spreads and price discovery transparently acted on by markets in anticipating public information. Action on closed promoter plays like Abbott and other Bombay club members may also take a backseat again till activist investor information agencies find good feet in the system

I expect the predilections ruling the market in a much stunted format to however continue to levels as Domestic players continue to advance the same as reasons for domestic business competing with FII flow run business on the Indian exchanges. Thus similar will be the fate of the optimistic SIT on Black money and the infinetismal differences in the execution between a Non BJP and BJP governments (ruling out any Third and Jhadoo Fronts) aided by an informed bureaucracy and technocracy survivors. However that is rather a rough draft to reform directions and not the final word and the majority is a heaven sent opportunity which the BJP will realise and deliver to the electorate for a coming block of years

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