Technical notes

The universe of stocks in India that adhere to volume and other quality standrards for trading let alone alforithmic enhancement and HFT program trading e\remain extremey limited. Given the choice and the sesnseless open shorting still possible in most stocks outside the Sensex 30 ( and som einside it yet) it is unlikely that the amount of technical correction on the rebound can be limited or remain slow and sideways is unfortunately not very unlikely. Even a sideways movement gets translated into a binary healthy/unhealthy state and the learning for banks' trading desks and the soon to vanish brokers' client trading desks are both the same, you can select a scrip or two for whichever movement you support, up or down.

Bank Credit and Power

Currently Banks could trade individually too given that Credit has remained up and the market has to take a stance on who (HDFC Bank ) has already been performing on the retail credit and the power credit offtake. Power sector credit has grown to almost 8% in the last quarter according to today's ET but almos t32 GW of it is likely to go downwithout being commissioned from the missing coal produce required to go live making potentially ( and quoting the Economic Times here) Rs 1.35 Tln a non performing loan having been drawn nearly 12 months ago. The Power sector exposure is already over INR 4 tln but Power NBFCs empowered to deal with the sector in isolation are unlikely to face any problems of bad debts from such overruns being on line with the project management in each case.

The Rate Hike

Unfortunately for other Capital businesses banks are unlikely to be able to digest the coming rate hike coming this Fridayfor its corporate borrowers but depth in Capital investments and our Economic hunger for Investments that have been flat may yet facilitate an even keel for infrastructure borrowers both in Energy, Power and even construction yet drawing down he big jump in lending to the sector from the last six months

 

Posted via email from The investment blog on Post