India Morning Report: Mr Sensex gets ready for the Budget round

Markets did celebrate with an early rally in the top half of the week and with the currency holding new levels, markets are likely to wait for big moves post budget announcements next Wednesday. The Rupee, true to form likely continues gaining against the Dollar even as other Asian currencies take the US Jobs report announcement to allow the Dollar to get ahead and the Euro breakdown also offers India better trade mechanics in the coming months. Asian equities are bullish and will continue the celebration on Wall Street overnight at 17000 on the Dow and near 2000 levels on the S&P 500

Nifty will hold 7750 levels during the day’s trading and the Pharma auto complex will hold new levels while the private banks will continue to improve scores and infracos will regain fresh investments led by IDFC even as GMR and JP associates fritter away investor goodwill on an equity/debt overhang that continues for them. Even SBI is likely to hold 2650 levels ahead of the next week’s busy prognostications

Lupin’s return to growth seems to underline better days for Indian Exports ahead joining the few really good performances in the last 2-3 years from Glenmark and Cadila. ITC and Bharti should be back in Buy lists at the bottom of their trading range. Those hoping to speculate in real estate mmid caps should note the fate of pharma and utility group Torrent which failed all litmus tests and is dumped this week. The Muthoot Finance IPO /rights ahead will likely keep both gold NBFC subdued as the new issuance exposes their pricing weaknesses and the company can do better by choosing a low premium for the issuance.

Bajaj Auto has chosen to stay away from mass markets as it faces the inevitability of Honda getting ahead of it on overall numbers and that is likely to coincide with the scrip returning to 2200 levels. Hero also gives up excess gains from the momentum rally on new monthly data figures. The market may return to Cipla and Pharma MNCs with the Energy complex between the OMCs and the private and Public producers and even IT catches up again as markets stay positive but avoid further up moves pre budget. The IT rally may be tempered by continuing strength in the Rupee from bond market strengths in the second half of the day.

F&O markets continue adding new interest above 8000 in Calls (sold) while Puts catch up with new 7700 levels.

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