India Morning Report: Banknifty on to 15800 and a high before Infy reports..

Ominous clouds gather before market open..the expectations from Infy are likely to turn into empty promises comparing the new management’s ineptitude for the outgoing founders as Gopalakrishnan and Narayan Murthy leave for newer vocations for their greay hair to exercise. The SGX Nifty for one did not like the big rally on Thursday and was clear int he verdict in late trading in Chicago, but pre open points to momentum carrying on from yesterday.

Look for a big cliff opportunity in the middle of the day as Infy results keep all market segments busy during the open and most positive utterances from Vishal Sikka’s team get standing ovations from the markets, expectations being subdued with the Rupee making a strong close at 61 yesterday Global markets responded with a big NO after the bonds started a new rally from 2.3% yield lows to we still see marks below 2%, equities waiting out the earnings season as expectations of a higher growth segment fueled by Q3 US GDP fail to catch on and the holiday season results come out only after Black Monday Markets may of course open back below 7900 and find strength instead in day trading once the run on expectations, based on real performance comparisons  from Infy is ruled out. If markets do close near or below 7900 levels, we will have a better start in late afternoon trading and next week.

IIP numbers apparently follow Infy results today and again expectations are for a rebound almost as big as in July. August scores had underperformed probably because of statistical discrepancies and the Electricity segment ahs returned to double digits making us hope for a better than 6.5% GDP score at year end but Consumer industry and Core segments remain uninspiring and credit offtake has not really given any better signs for better expectations in August data to be released. Consumer industries will likely discourage anew after Core industries also rebounded with a score of 5.8% in the infra segment and 4.4% yoy till August in the core data reports yesterday

The Rupee and the Bond markets will discount the changing face of liquidity but will overall follow the better fortunes of the Earnings season and will not be swayed by global performance or Infy releases (unless over performance is underlined by the same) through the day. Infy in the meantime may not be excused for returning to more value business propositions that have traditionally been IT services  ( “body shopping/maintenance” vs consulting/product management)

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