The Services PMI hit a 53.5 a good 5 points lower than the 58+ in July primarily on new orders going down 6 points from 59+ for India in the HSBC MarkIT survey. In fact, IT export orders for the month of August hit $19 bln from $32 bln according to a ET report today and Goldman Sachs , Citi and lo and behold led by BNP last month, derated Indian IT with earnings downgraded by 10-15% by Citi and Goldman Sachs and Citi bringing down their IT price ttargets by nearly 20%. IT of course is a sterling non performer, due to noted reasons of US export market dependance but also due to non availability of a match of skills or preponderance of lossmaking beachhead contracts in the Domestic IT business which has just about been swept in the corner but this time shows up as an ugly hump on the carpet , very much in the room. Where irrespective of muted statements or lack of belligerence in recommendations, everyone has expected a 20%+ growth even in leanb times, IT and Autos are reporting double digit reductions in business. 

Despite the loss in business in Autos, down to 70000 cars a month for leader Maruti and less than 150k for two consecutive months for the Industry, the indusry has simply substituted the 500k a month and 300k a month two wheeler satraps in Hero and Baja to sell the India story which remains the most likely top 10 positive market destination in 2011 behind Indionesia and a couple of other Asia Pacific economies not yet hit by high inflation. Even Singapore despite its great uinfrastructure is off the charts for the volatile June quarter GDP of -8% over Q1 and 2% yoy. So you need to defend the indefensible and the resulting climb in Two wheeler Hero and Bajaj and the new SUV killer M&M growing sales in this market is alreayd what would have been deemed healthy in an aggressive stock leave alone the defensive they must be deemed right now. 

From the commentary of course Pranab Da is already a vindicated man, other staking the lead from him and defending the India growth story again not because of unjustifiable emo nationalism but serious funds flow issues as a minimum number of large cap investments are a required lot and the Healthcare sector or the mid cap banks may not be able to justify their growth prospects in the next six months

Banks are the leading indicators of growth in any country's scheme and even global banks which are themselves reneging on their international commitments with trouble on home turf And with them reneging on their 2011 numbwers with no respite in sight it is rather futile to runa technical rally in the markets to 5200 on such short of braeath ( breadth in market analysis terms) investing anlysis. Like they force the optimist day trader on a sunny day, the bears should be in the room, ready to and consummating the reign of the Kauravas on the Indian Sun in the next few weeks and ou should let them do it. As would turn in Europe over the next few days and as hedgies licking their wounds in July and August can see globally, whether it is Paulson or Einhorn or the smaller India boutiques which are the only ones canvassing for funds right now. 

The Land acquisition bill is definitely a good deal for those on urban and rural property as land registered values are woefully behind marjet and despite the lobbies already screening their disgust, I would sep out and say their is a lot of profit left over for infra and steel companies depsite the 6 fold increase in land prices, that number still being an insignificant low double digits of ther project cost. 

 

 

 

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