India Morning Report: Banks return indices to glory

Overnight, Yellen presented her semi annual testimony to the House Committee on Banking putting forth a new calendar for the US interest rates to return to normal, feeling unconstrained in her criticism of the failed objective of growth. Back home, Kotak reports business as usual and picked up on the day of recovery of banking sentiment as the day ended in gains for SBI too up back above 2500 for a start. YES Bank reports later next Wednesday to change its priorities again.

The sharp coming rally in the Dollar may allow Rupee to drift to a new range low of 61 as well but one still wonders if Rupee will indeed rule above 60 at all in two months time. We expected FIIs sitting outside and having exited bonds to have come to other EMs and India debt again, having exited back in April

Adani Ports picked up again from where they left in the post election melee as infracos stepped into the saddle and yet not large cap Pharma plays displayed strength on rising Export shares of pie as well. ICICI Bank also on expected lines crossed the flat range at 1360 in the last week to near 1400 levels as Banknifty returned to 15000 levels. Banks will continue the run today as will P&G India listed stock. Relinfra accounted for the majority of the Anil Ambani group Mkt Cap recoveries yesterday and today would follow with the group companies returning bigger gains

J&K Bank also looks promising, the lightly traded stock having also hidden in the prior rally till January and returned concomitant to the rally again in the April rush till 7800 in June though mostly defensives hiding away during major trend days catch up much like another PSU biggie SBM that had such a mini rally streak till 2010. PNB gains again bely its weaker balance sheet as it continues to bleed on low quality assets but runs on par with big brother.

HDFC will also gain in affordable housing funding, though UBS seems to disagree and Jefferies also posits better days for bank lenders, Keki Mistry ‘backing Housing companies on Morning Tv as ‘I leave for ‘work’ ” (rewrite stub]

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