India Morning Report: IIP shows India inc is back in the saddle

IIP inched closer to 5% on Friday post market data releases, raising hopes for a strong performance in the first quarter of the fiscal as well as an improving trend thru July – September. The Rupee responded to dive below the 60 mark, the government having promised to step in if the Rupee rises back too sharply. Sharp cuts in the NBFC sector on Friday as the indices dipped on continued watchfulness at 7500 levels would be reversed back at the beginning of the week , however we are not backing any rise in the currently listed realty stock.

Thus also the IT stocks will recede again and buying in Pharma will continue thru the week as weightages within the export favored sectors increases in the Pharma cos favour. Sun Pharma has escaped the 700 hatch to 750 levels and is again in a new zone for the stock

Energy stocks may temporarily react to Oil price declines contiinuing but with the business situation continually improved and the Fiscal target already improved to 4.1 % sentiment will catch back with the stocks as they remain available at value levels and GAIL has caught up witht he rest but continues to enjoy a limited preferencde over the Oil and Gas stocks. ITC and Bharti may again consolidate at  350 and 340 levels respectively. Bharti has initiated the sale of its African Towers to a local business to reduce Opex.

Monday afternoon update: The GAAR fracas is a big onion as the Current President and the BJP FM both seem reluctant to take it out of circulation. However the disinterest shown by the markets in its wake in the morning session was mostly a false wall of defiance, as Investors are likely to continue investing into the recovery and it is not a black and white position for anyone with India entitled to some if not all tax revenues from its large market on offer.

 

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