The early morning run for the Nifty has panned out really well, with the 5850 mark looking as enticing aas the hitherto 3800 mark and no employment for traders yet again on the upswing or as now most would like to say in the week of consolidation after it ends the day after expiry without new brilliant moves of mathematical elasticity of direction brought about by Expected returns of each stock. Algoriuthmic/Program trading however is different yet and with new regulation pon HFT preceding other countries' attemopt at controlling the HFT beast, Goldman Sachs trading rooms and that o f JP Morgan will continue to resemble SOHO offices trading the solitary Gilt in action.

The OMO scheduled as promised after a big break that definitely helps the cause at many ratings analysts' desks is still required though for what would have been $3 B but is considerably depleted in Dollar terms . Similar problems with credit growth data also top up your and my morning cuppa as the absolute growth of INR 300-500 B every fortnight is now going to be a below par performqance especially for one of Asia's Top 5 equity markets of 2012 and probably the Top 3 in 2013 as Phils and Thailand are probably over the hill from all the buying un abated since china';s slow poke began in an atmosphere of  European banks' left with Asia as the only profitable franchise in 2010 and continuing through their liquidity squeeze on Asia and post the ne liquidity moves of 2012.

The Euro is king right now among currencies and that means the Gold and Silver tunder will be missing for some more time though buying has begun. China's industrial demand for silver had thoughtfully started increasing this quarter but accordding to somenon conventional indicators china is still a long way away from a beneficial breeze starting to blowin new custom even as impports continue to rise optimistically keeping retail sales steady on month. 

Back home in Mumbai, Bharti infratel IPO is finally up and running and seeming there is more clarity in the CDS market for insurance cmpanies as well which could be the leather for the leather hunt required in fixed /income markets to keep the comeback int he currency markets esp for those longer term rupee investors which have stuck around after banks withdrew fromtheir Bullish rupee positions just last quarter albeit a bit too soon. Despite market movers, I am not very fine with the move in Canara Bank or other PSU banks that are keeping the Banknifty abreast. Its pure sacrilege of the same variety that brought the house down last time. NMDC should be a good issue and good pricing will bring good treasury gains to banks supporting Divestment OFS issues like the one priced at 155 last fortnight

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After months of continuous challenges on every positive move using the derivatives market segments to create an anti trade, the short, unemployed and useless club has finally been left with no sponsors as the Nifty rages on in an apparent free ride to near 5800 levels this Thursday. Of course, that also means I am reduced to doing market commentary after the shock and awe moves of the short club prepped me out of the trading room capital allocation and India's reform turnaround story has been reduced to the Hindu rate of growth rubble but the winners are not complaining and salaried folk have returned to stiffer shores of bureaucratic serendipity and broke purse strings have instead brought peace and quiet on India Inc before the recovery, which apart from challenges to ploicy execution being reduced to just audience entertainment pop quizzes will also see bollywood' role remaining limited in India Inc's growwth , a Rahul Gandhi struggling to become a leading light on national stage also a perpetual side show, blackberry and yahoo as always turning life sunny side down out and around in the subcontinent without due global impact, and the recovery being not followed by fattening of Fixed Income, CDS and / or Corporate Bond markets here or better divestment stories on the quity bourses or a strong recovery from the Rupee the specter of whicch raised many a heckle in upper middle class india stuck on their dollar savings from IT or Non IT exports and infact even includes Shashi Tharoor and Raghuram Rajan (UC Booth) in active roles in indian government without any impact or reach influencing them to do any better and without any growing ICICI Bank or Goldman Sachs bothering with retail and real estate discipline or investing in a larger network in their pet emerging markets projects for now or any other such easy expansive solutions the nations ever growing MBA and DINK populations would enumerate as basic addendum to the new Aadhaar ID they start flaunting from this year.  And none of this hopefully counts as dismissive, depressive or disparaging arguments for the stock markets' continuing linear move to  other never before levels witha new exchange in the mix, India's veritable cornucopia with its destiny to keep on growing to no. 3 in Global GDP ranks ahead of everyone but US and China ithout a move of any substatntive change in the per capita GDP or Per Capita Income for its citizens 

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The 90 point move on the Nifty yesterday, trying to make spectators out of those opting for not such a roller coaster move means that the classic correction/ consolidation prospects have also improved apart from the secondary improbability of conditions improving as no policy execution is likely.

However markets would woot for Goldman Sachs' revised targets and Moodys' cean chit for the subcontinent's Economic goliath "Mumbai dreams" upping growth forecasts to stratospheric ( and they were so "stratospheric" just 8 years ago) levels of above 6% by FY 2015

The Pre Open went along expected lines, traced the line in the sand for bear traps withost rising prices from Bharti and HDFC Bank amongothers correcting to Monday levels before the Pre open ended with a sigh above 5730 , cutting out shorts from the lifelines to the next few millenia. Decks are cleared for all cash subsidies and other such tools that would ensure no Old india thus gets in the way of New India but I would think the more things change the more they remain the same as young India hardly owns any mints esppecially if high priced MBAs ( like us) are as few and young couples that are actually growing Bangalore's per household income and disposable spend levels are actuallya s relatively poor as they are with MNCs leading local IT companies in correcting compensation to an affordable baseline suitable for fatter expansion of numbers on call from more working class ratios like teeth to tail ratio ( ratio of solders to commanders) and enabling keeping existing customers happy as possibly only viable strategy inputs including at banks and marketing consumer companies hitherto fueled by top management / boardroom expansions. 

Of course for the markets that aside is as peripheral to the rally as the Moodys' report they triggered to a big high yesterday and as peripheral as the bickering in Parliament led by that able woman on how to lose the no confidence vote to be tabled by the opposition in Parliament

Banks esp Axis Bank and HDFC Bank that led yesterday could exchange roles with ICICI Bank and because the fourth member of the trading independence consortium of the banks i..e. SBI or Banknifty (PSU - not a defined sub index) is incapable of leading from the front without crashing through it is unlikely that the Nifty will easily cross over the 6000 line yet again. I wonder what gives when the Nifty finally does it in a few weeks from now.  

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Though it would not seem like it to you and me and even those who were lucky to get into the hallowed portals of JP Morgan and Goldman Sachs before us, this is a continuing bull run ith just too many interruptions and cavilling to ignore. Witness how there are not more than one nay sayer in a crowd of 50 commentators. Witness also how market traders like Ashwini Gujral and SS keep trying to put out short picks every now and then but come back empty handed at 3:30 pm. Also witness how the ruepee's weaknness making the IT sector attractive means suddenly all other fundamentals are "poof" vanished in the air. Importantly, as someone caught me on telly today, ( I opened the screen to TV18 as he wasz speaking the subject) , portfolio inflows are strengthened by Rupee's unbroken move towards the lowest on record 56 levels and odollar sales are washed up by the high tide of month end Oil purchases and the burgeoning trade deficit as is usual for our second half of the fiscaal, and for the second year running, we follow up on daily tidbits of how India will no t be able to manage the fisc target but the bullishness remains on call.

Did i cost you a fortune? I may have because as a single hand I was unable to suitabley direct you on big time nbullish calls like Stride Arcolabs which has always been an emergent blue chip on my card like much of the remaining sector including the crop of MNC pharma led by GSK which as known for ages is going in finally for a fresh buyback to bring its stake up to the now standard 75% for MNC players in line with SEBI requirements of a public company. But I do not regret sending more the way of IDFC who also has an active PE arm in non infraco projects apart from its starting blocks it purloined from StanChart's Mutual Fund in India. 

On global cues, bith Europe's new Grek agreement and China's slowdown had nothing new to offer for global portfolio investors and hot money trade fronts while FDI related or otherwise Policy execution remains on hold in India that also been duly discounted by the market aand any pyrotecnhnics by flailing oppositions and Catalonian adventures are unlikely to firm up as a new trend into the mix, favoring the recovery of Europe into a mild recession and now despite growth in UK and Germany.

Gold and Commodities look unwilling to make a move but the Dollar is not getting any stronger and the Rupee's weakness is another capitulation to current deficit demands by our policy makers as our champions of growth budgeting find themselves unable to get to the next watermark or making a stand in execution or in substantial politics.

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Early morning cues from Japan and australia made it a likely comeback week for global equities despite the ongoing fracas between Appl eand Samsung. in the meantime, despite a great show by Indian corporates, growth is slow and getting slower even in China where recovery is imminent leaving indices at 'age old' new levels near 5700 when reforms were announced. Reforms are unlikely to be completed but the global Economic easing is in progress responding to wide swathes of liquidity and RBA mulling a rate cut int he near future. The nature of theproblems facing Spain and Greece have changed and today's decisions will further underrite ta big bull move in the year end and Indian markets with large foreign participation will also continue int he same vein, variously targets being set at 5900 or as would say breach 6000.

Encouraged by Etihad's move on the $2 B Jet Airways for a substantial equity partnership wstarting with an immediate infusion, the Indian investment story segues nicely with issues of promoter stake ( JP Infra, DLF, Merck) and Divestment ( Oil India, Engineers India )- Check ET for the morning wake up call from OilMin

The Hindustan Copper story of Friday is unlikely to deter other Divestments with PSU Banks joining LIC in getting basement bargains as investors with pockets unfortunately to not have the depth to take such risks on the public sector book of india Inc. A piece by DRON Capital on ETNOw seems to be doing the rounds praising some banks like OBC and Dena (PSU) and Federal and Karnataka Bank ( Private)  that have boottomed out on their worsening credit assets according to them) Dena Bank of course would be a big surprise if its assets did not improve but big banks like BoB have flailed and even more shockingly the bottomless pit for SBI and PNB continues to get a lot of cast offs fronmthe bank management underlining the basic reasons why India Incs good performance continues to be ignored but global cues get the required segueay from Indian Capital markets nad Rupee's rise is stunted despite a continuing weakness in the Dollar with the Yen running to 90 and a solution to the current Greek impasse in hand for the EU in Brussels/Strasbourg

Indian Cricket's loss may yet be a year end gain for Indian equities and by a wide margin

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The resilience of the markets is absolutely breath taking if you can let go of the greed of the trading tick and forget you could have created 10-15 more points in any move of the last 2-3 months. INVIX must be one of the most stable volatility indices needing some good data training over the next 2-3 years as it gets two distinct levels along 2012 and tries every other vol input inbetwen except the limited market range, setting it independent of market levels which becomes counter intuitive after this length of time.

Business volumes on the NSE are holding and MCX equities seemingly will only add new volumes from its 300 registered members as and when they start with the same 1000 scrip univerrse ( NSE has 1600) . Chinese data was actually positive but the markets wanted to see a bigger difference and local shares continue to tank from 3 year lows in Shanghai /Shenzen. 

The Thanksgiving anti trade in Asia and Europe will likely fade away till Monday when US markets open as traders await the big news from Europe and EC takes the weekend time to solve the big problems UK has ith the budget. I ndia is now actively interested in these negotiations with its EU trade droppoing at the expense of others and its Trade GDP seriously affected by continued recedssion in Europe which it is hell bent on following up with large spending cuts on the EU Common budget and the slow dribbling away of the banking union while UK firmly in saddle strengthens its local EU trade in Spain, Porto and Italy

Bajaj Finserv morning interview on the networks was a great segueway into the stock but comes a little late even with new business premiums growing at 18% and Allianz interested in increasing its stake. Like PSU Bank Capitalisation and Drug Price Control, Bill impact from  FDI increase in insurance is also likely to have been played out long before its actual play in the House and is unlikely to move the bulls or the bears sitting on selected positions. 

The underpricing in Bajaj Auto continues to be a big surprise and Biocon is a good long term buy at these levels. Why are Orchid and Opto out of favor? One fervently hope it is not because promoters are hoping to be bailed out on their personal loans

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In an earlier story of the series we had mentioned how India featured in the top remittance receiving nations worldwide in 2011 with a score of $56 B in remittances for 10 months. Remittances to India have since grown by almost 25% to hit $70 B in remittancesin 2012 according to a lead in the local business dailies. mint develops this news in the World Bank mould, quoting the 'bencheconomists' to a $534 B score for developing world remittance inflows by 2015, adding Pakistan and Bangladesh to the mix. Inflows to China are obviously growing slower but are still a hefty $60 B this year The World Bank unit putting out the report also mentions $135 B in remittances for india including NRI deposits which can go back as fast as they come but have been coming in unlike China's exodus of Capital looking for permanent migration to the West or even Singapore. 

Phils, Mexico and Nigera are others who rely on global diaspora seding increasing mamounts of money back to 'familia' inthe post crisis world. Europe remains the larger source of remittances., followed by America and thence only the Middle East. 

The Rupee continues to neglect these news flows against the global tide with the Dollar holding 55 levels in local trades

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Investors expectedly got blindsided by companies choosing not to buy back and delist their India subsidiaries even as stocks crashed in Honeywell on news of the change in plans. The stock run up had more than something to do with the correction and the decision and is a common conundrum for many MNC arms in the country not wanting to continue in the listed subsidiary business model but cowered by the price of delisting for the less than 15% stake in many cases that is priced high in expectations of a block buy back

An ET stat compilation of date shows thomas Cook, Kennametal, BOC, Sharp and Astrrazeneca already showing strains and having probably arrived at a new management decision crashing prices on the local exchanges bringing back the buy back option for those unable to envisage a further stake sale here it  is more sizable than the 1.43 nmln shares required to be put in the OFS by Blue star and may again skew the probablility of an OFS.

The regulator SEBI is unlikely to further  stand by patiently as  the delisting stories have been coninuing for almost 10 years in many cases as the FDI regime has become more open on business models espoused by Wholly owned subsidiaries.

One foreign bank also listeed in India after the crisis broke but banks have been avoiding creating a new risk silo for India , neer licence operating only CIB franchises and avoiding retail business altogether

Bluestar and Honeywell are pricing their delisting Offer for sale in the markets to get the stakes down to 75% removing them from the target delisting universe.

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Probably some of my friends might find this calling the chickens before they hatch but more would understand why we are calling the upcoming Parliamentary challenge just another cog in the (w)heels (sic!) of India Inc. 

China's Flash data in the meantime shows HSBC's Private survey catching up with recovery as expected after a few scares in the last year when itdipped and clipped any recovering trends and underscored the state PMI by a higher and higher margin. The Flash Manufacturing PMI is above 50 and that means the composite too will scratch above 50 and Services in China can also conme on up and announce a full recovery. Though MOM retail sales data remains a challenge, the annual rate of growth with weak Japanese exports also getting a bit of hope from a climbback in almost minimised Toyoda sales in the kingdom and Nissan and Volkswagen were also hopeful

The last 50+ HSBC Flash as 13 months ago. Back in India, nothing's moving the markets ahead of the anticipation of a big blockade by Mamata Di and NDA independently already shoing that the fracture in the opposition is likely to eliminate any serious threat to governance but underwrites another loss of 20 orking days to the nation's Parliament, hoping to clear as many as 17 bills in this session hich the ruling party will unlikely table so precipitately. 

Asian markets rebounded led by good growth frm the new ASEAN low fare carrier Air Asia and a big jump in Korea and the new weakness in the Dollar has indeed multiplied nefariously on early Thursday trading resulting in a nice rupee open too. The Aussie in the meantime cratered as expected after the Yen offered a nice segueway, Reuters commentary (Neil Kimberley) even betting this rise goees beyond 85 to the Yen giving precious ammunition to Japan to recover the Domestic GDP growth thats been flagging under pressure from the neighbour while the USD gets a leg from Treasuries that Japan has been exchanging for its JGB holdings

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This week's BTST slate or longer investment slate is looking extremely promising esp as IDFC and ICICI BANK among others are back at attractive levels. The afternoon surge has already seen a 2% jump in ICICI BANK levels and mor eis due in both HDFC Bank and ICICI Bank.

Infosys or other tech remains a specialised trade and one that is likely to burn sooner than later as the Rupee flirts with its absolute lows in this trade cycle and you should be green , plus or however you say bullish to your forex broker on the Rupee with FX reserves at $294 M the chances of someone enticing RBI into supporting it or even raising that expectation are not so bright and so the Rupee is unlikely to get another twirl in the middle of a global trade going against the Oil and the Dollar. And franjkly that yet limits the possibilities for Gold than increasing the possibility but Gold was due to rise after the October buying patch in the Indian import scene.

Jet airways has risen smartly and those waiting are well grounded in Tata Global and Reliance infra/GMR at current attractive levels. JP Associates I guess is still up for a marathon rally. Biocon is a good longer term pick. Hero Motors may continue to be cautious on not so encouraging market share data but Bajaj Auto should be good to move up smartly. Bjaja Finance / finserv and <M&M Financial follow on the pull up and sector stars ITC, SUN and Jubilant remain greatly poised

The ONGC bulls are definitely looking for such an entry point egtting to start the rally at 5550 today intra day and so that is accumulating already for a big move. Another jump within tomorrow or day after is from the Power NBFCs including Powergrid and REC

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Markets for the proverbial retaail trader are now right next to that other veritable institution in iunaction and eyes glued to electronic networks. Yes, the market ction , especially the lack of it, comes a close second to the inaction created by NDA in the upcoming Winter session with a few failed No Confidence motion attempts. One already wonders if the markets wwill expect further implementation at 5550 level sand react negatively  to such non action like the straitjacketed range of now, enticing increasing short positions strategies

If you are exiting positions such as J&K Bank (cnbc commentary) or Jubilant ( despite the recent Goldman Sachs upgrade bump, which could just be a wall strategy from the brokerage) do not put all your eggs in an illiquid Karur Vysya or a tenacious VIP both of which are just likely to be jettisoned to their ever steady lows they flatline to. Silver would hit the high bars by 63000-64000 range if it crosses 63000 and Gold is just not going any higher from here till I would prefer some certainty in political climes for a chaneg as I would prefer gold investors take this time to reevaluate the soveriegn hedge of all depressions, recessions and even repressions on the back of a host of currency action in this second cycle to stake the global weakness in USD and the likely continuin gweakness in Oil. After all like its name Gaza is just a strip in the world of OIL incapable of escalating to a real resolution of palestinian woe. 

The trubles of HP are likely going to be instructive for India too and the vaunted distributor tentacles could be wiped out for many MNC franchises in India to come, led by the large wins (finally) in retail space from Dominos and Jubilant, encouraging the JP Morgan and Goldman Sachs' and the Apples and the Dells to consider an expansive lurch into this market like in China instead of the fool's gold pricing strategy and a CIB franchise in rare climes. 

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The markets are slow because of the endless disappointment awaiting them at 5750 levels but the underlying strength is finally showing after Banknifty got ready for a tradeable surge at 11300 ( not that it is happening immediately) having stabilised at 11600. Private Sector Banks hincluding behemoths ICICI and HDFC have to make a clean break from PSE practices, indices and even market moves. Any signs of that will be welcomed by larger investor audiences from the looks of it. 

Fortunately at 5580 itself, some domestic brokerages have opened up to the idea of an ONGC to the uptick. But it takes more than one Angel for that elephant to move, investors and communities entrenched in India's only Crude Oil 'producer' (importer) Oil prices moved back from their lowest to $110 on the Brent for that unfortunate forage by the Jews. Whatever else they get right, they seem to blow it on the anti Gaza strip party. Just like the 20 year old kid, who summoned up the courage to say why shutdown Bombay? Not quite. Very different situations, but yet almost the same semantics.

FTIL has caught the fever and some domestic brokerages are also catching fire. MCX equity segment traded INR 2 B in Chhat trading yesterday. The run in M&M financial was confidence boosting. And muthoot and Mannapuram fill also come but only to those who wait. I think Dollar has more weakness written on it that people have not cottoned on to yet. Yesterday's move doqn from 81 to 80 was just the tip of the iceberg and the Japanese are buying US Treasuries so the Dollar shld remain weak on both PY and the AUD in the same trade cycle and that can fundamentalyy make you askip a few beats in the normally separated CAD/AUD cycles and the GBP/EUR cycles against the Dollar. 

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The nifty of course is now at 5580 but trying to keep its chin up with telecoms building a new stream of victory tamponade for the analysts. However both Idea and Bharti have truly won in the 2g/3g bidding games bringing public auction methods to a knee with a little help from a redesigned judiciary and CAG. A cynical view at best but yet it explains more or the market than any other stay flat till you get to buying hordes strategies. 

The Dollar starts the week in markets of the orient at the promised weak note, markets assuming liquidity but more than that the Japanese covering of the Dollar seems to have united Dollar trading streams in the mainstream markets wth that of the AUD bullish trades ( the RBA will really shoot the moon when it really really happens) The Chinese Yuan in the meantime seems to have strengthened pretty big at 6.22 considering the currency's range and the internal liquidity build ups may start having a currency impact taking the Dollar stronger when this current move flatlines. Till then the Pound and the Euro are both enjoying the big reprieve and are likely to trade stronger ahead of Monday US markets open. US equities will open strong. Again it underlines how India's limited weightage should finally ensure its moves are aligned with Global markets as many times as they are independent. 

For a moment Energy politics in india's markets is coming as secondary to the Telecom Politics which has devolved in favor of the private sector markets. The NPA saga for baanks too has only strengthened the need for markets to be discerning in their stock selection while the broader ETFs like GILTs run out of real returns this quarter but specialist pickers may grow the best strains yet in individual portfolios. Looking promising are coffee, retail and pharma with ITC and YES missing the bus for big time portfolio adds after Bharti's unseen comeback in the auctions and the return of a profitable operating structure in its biggest market(s) in the subcontinent

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The Diwali holiday shortened week proved the dictum that if you flog the same levels for the market long enough the markets need not kneel out of fidgety bear's interest or tired bulls leaving. However, the markets nearly rerated themselves and shorts ar eopen in the market esp as revised Telecom company targets including winner Bharti may be too much too soon for operation al challenges and negative margins in most markets on wafer thin Operating profits. One does not except writeback profits either except for those like idea who won back the same 9 circles from the previous auction without another penny in cash due to the government from them

Banking as expected will start Monday with strict guidelines on what is private and profit making and what is not, BOB and SBI showing they are in no position to compete in the sector even with size and rural reach or international access on their side.(BOB in Africa)

The market punters are still markedly divided along the same lines in consumption stocks with those that favor Axis and Jubilant and those who switch ITC, JET, YES and a few others, keeping them all in the not so Mid Cap but not blue chip ranks. The continuing fall in Cairn and GAIL makes that sector as close to Value pick range as it is allowed to get but neither ONGC nor GAIL or CAIRN look like they will be first picks in the coming week the foreign brokerages and morgan stanley having marked a flat range on the market which has obviously found 5620 to be more than fairly undervalued but is still a bit stuck in the mud even before 5800 is ht on the tripwires ( a tripwire is the simplest form of a shock trigger setting a limit beyond which the alerts start ringing)

Biocon has made another deal with Bristol Myers for anti diabetic medication while the diabetic market globally is expected to grow to nearly $60 B a year with even Novo Nordisk insulin yet just 25% of the market. Automobiles however do seem to be near the bottom of their range and could start ff the week's investing bits till infra traders make a mind to take a plunge again IDFC in the lead and private banks like ICICI Bank and HDFC Bank following in.

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Finally a small intra day bet on the Dollar overnight

That is all the correction in the Rupee amounts to for speculators as they use the pre open deadbeat sentiment in equities to climb to 54.90 in Spot and 55+ in November. However the equities are likely to open and stay upbeat as the overnight trad would be lost by 9:30 and isnstead of a BTST bet on the Dollar, Rupee will follow global cues against the Dollar as we suspected yesterday after the recovery of the 10 Y yields to 1.60% 

The questionable stagnation in equity levels

Though there have been occasion when investors have stayed on while the sentiment weakened we would still aver that this time investors staying on have quite some skin in the market and thence this 5600/5650 level is unlikely to be breached as the Private Banks try to reach a point for the high jump statistics to get loaded on the Risk curve and Shoot for the moon. Unfortunately this is the first sign that the market is unwilling to move without bets in Banking making the Sector that accounts for 1 in 5 of the GDP orth 1 in 2 in influence as it makes a good companion for each such investable sector including Automobiles, Consumption and Lifestyle (Non discretionary or Discretionary and luxury), Pharma, Insurance and NBFC, Utilities, infraco and Aviation except that Jubilant and Educompa re unlikely to start off the festivities and the Jet Airways rise by itself i s unlikely to sustain ( as above)

Also Construction will yet drag as credit to the Sector has come back to manageable but real estate buying is yet to pick up and has been an over rated play surrounded by quicksand margin calls. 

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Diwali is over. The uptick is not over. No one is in any hurry to buy though. Esp those sympathisers of the Banknifty/PSU Banks are flat/in deep trouble. Bank recapitalisation on Tuesday is likely to be a non news making show as far as the market traders are concerned. It is mostly aboout sending good money after bad money being somebody else's problem, including recapitalisation for IDBI Bank hich unfortunately has quite a future but has belied it by not growing to size. Such examples unfortunately do not abound and the PSE space is more sick than the nanny who stayed with the kids despite the jaundice or Pujara's test career ( he is playing pretty nicely at Motera though)

ICICI Bank and Axis Bank corrections are inevitable till the markets do a more than 50 points on the upside.  YES Bank has no investors moving out but the range is capped and it is no longer the trader's yum treat in the upmove, more for the second wind after India Inc is actually in the stride       ( that can be a slate as near end 2014.) 

Healthcare and ITC/Bharti are the big picks though Bharti's rise in the morning for the 2G auction stand seems more a misunderstanding as Bharti would probably want much more spectrum in time mand it still may not come as cheap as 2001. though one wonders why the whole round trip on the Scam is still held out as valid by some of our young turks. The secretaries even then assessed and realised charging more would make the state coffers bankrupt and that is what happened after the CAG's involvement and the Soupreme Court judgment, except for we know more about Barka Dutt and some PR agents

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Markets are not ready for a sell off or profit taking of any kind, but this looks like an assured 200 points on the Nifty north of the 5650 mark while Banks wait at the 11600 mark and the consumption plays get ready fro ablowback but ITC remains a BUY. 

Power NBFCs will pick up the slack on investing interest in the banks caused by a preponderence of the short PSE bank stuff in the NSE Banknifty / BSE Bankex and this saturday's MCX session will have some pickjs for the connoisseurs right no as delivery will be completed by Friday though cross exchange arbitrage is not set up yet with inter exchange trades/statistics flow required by law but not happening wth the new exchange segment at MCX or within BSE and NSE

The Dollar index seems to have peaked at 81 not because of the high 81 score which can still go up but because US yields have come more than above water to sustainable 1.60% levels and are unlikely to go stronger than here as that would fiscally start hurting the USA as it tries to avoid the downside of near 0 interest rates.  That means positions should have started building up on the long side of the Rupee and supporting inflows to NSE equities are possible if not probable

At open, Banks are a buy as Banknifty hits the sliders to 11400 and is ready for good quick footed buying in todays first hour

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WPI series was not expected to provide a falling trend but with August data revised to 8.02% and September at 7.9% the October score at 7.55% is a real outperformer for India Inc. Fuel inflation even at 11.71% for the month is still not as high as it gets but Primary articles data (also revised higher for August) suggests that apart from core inflation at 5.95% ( manufactured pdts) and 6.6% (food) even the primary articles data is in control. CPI however has gone nose up for the last three months hitting 10%(9.98%) at rural and composite levels(9.75%) this month

Primary Articles Inflation for october 2012 is 8.2% down from 8.4% in September and 8.77% in August 2012. Diesel hikes will probably still show up in higher inflation data till January 2013. 

Industrial growth dipped precipitously again in October but the whip in the data due to Consumer markets can already be seen to be a lie as one can see from Festival sales reports including record 100K Hero Bike sales on Sunday fest and will climb back giving credence to recovery believers including Goldman Sachs though Credit Suisse tries to see Bank restructuring as a bad start for the rest of the FY of India inc after Diwali ( see next piece, up above)

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The October monthly deficit climbed to a $20.96B in India even as larger trade behemoths with monthly export volumes of $160-180 B in China and US returned higher surpluses ($32.5B) and lower deficits ($41.9B) spurred by jumps in Exports. 

Indian data is ofcourse skewed by both the rush for Oil purchases and a downtick in imports not just in Europe but in US and most other India customers. While the European contraction is worrisome on an aggregate basis most global trade volume has been replaced by other catergories for other customers. However Capital Goods trade remains one of the most severely affected led by downtick in such Exports from Europe (Germany) and Japan

Indian Imports rose $7.5 B for the month and the Rupee as expected inched towards the 55 levels. Indian IIP has been trending at lower levesl since the Global trade contraction picked up force in mid 2011

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Markets are not closed today or tomorro and muhurat trading times should therefore be announced tomorrow. National Spot Exchange had a special session on Dhanteras and the Commodity markets will have a similar one today. Fixed Income markets are flat and SBI had taken the sails out of the Rupee and Equities on Friday. Of course the Rupee market has had other reasons as Asian economies find more Dollar buyers and a rising oil spike confirmed the strength while the AUD, CAD and even the EURO could trend back into confidence this Monday and start the Dollar off on a sleigh ride including the bump on Black Friday and all the ay into the Holidays. 

The Diageo deal for Sorghum beer or the much closer to heart challenges on the FMCG play of ITC in non tobacco businesses are not likely to stir the market but most houses could be rong about the latter as the brands are well set up and the Indian market ill find a likely bigger windo for ITC brands than HUL or even P&G with the connect established. The Indian Hotels deal or the Suzlon Repower disconnects are still mendable but unlikely 

DLF and Unitech are unlikely failures this year and ill continue in the same vein so they are futile unless the sector jump is more broadbased and as of now similar tagging besets Reliance Infra and GMR Infra. Ne bank licences are likely to see a good move int his rally to 6000 especially as YES BANK and IDFC look to make their mark as blue chips from the Emerging winnwers and they will attract larger investments per se. The HDFC Bank vs ICICI Bank war will be back in  2013 and is likely to impact this rally as the PSE banks become non entities after the SBI non sequitor on performance and the disappointing news on NPAs so eagerly awaited by China detractors and wholly unexpected in India . These are unlikey to flag 'tail events ' in the respective markets in Shanghai/Hongkong and Mumbai/India

The Rupee could be looking to cross to the threshold of 55 but definitely loses steam at the 55 mark and may be prepped there for a rush back to below 54

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The Six year old dream to snip and whip the USL Indian brand portfolio with Diageo has borne fruition with INR 33.3 B for USL and INR 24 B for UB Holdings while United Breweries did not seem to be mentioned in the deal announcements and presser at a good valuation for UB group at INR 1440 per share of wwhich 10% will be thru warrants and the first 19% will be from group companies . Vijay Mallya will be holding a residual 15% stake and continue to be a chairman at USL. Diageo will hold 53-54% in USL 

Diageo spirits known to India include Smirnoff, Johnie Walker and Baileys. Other global hits known to connoisseurs include Jose Cuervo (Tequila), Guinness and Captain Morgan. As the press con just concluded indicates, African and EE&ME markets could welcome Indian whiskies as well

Indian premium IMFL market will be evenly split and grow from the current $160 mln odd to even 10 times with global brands bidding each other directly as has turned for coke in the NA Beverages markets. In the latest quarter Diageo has grown evenly in African and Latin American markets in double digits and a faster 30% clip in European markets like Turkey. Vodka has been on the wane in India this quarter but Emerging markets make 40% of the Diageo portfolio. Diageo investors have not taken kindly to the acquisition announcement 

Johnie Walker grew as much as 15% in FY 2012 in the first six months. India is expected to grow 4-5 times in the next 5 years to more than 600 mln coonsumers as per Capita consumption in India remains very low assuring the current CAGR of 15% to continue without a break

According to the chief, KFA will not receive any funds from this deal. Diageop will be further making an open offer for 26%

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The deterioration in asset quality though well within control at SBI to 5.15% or INR 491 B does not meet management statements of no more deterioration in asset quality. The written off loans of INR 14.92 B and reducing provisions of INR 18.5 B from INR 22.73 B a quarter ago raise questions of capacity and capaability even as the Central bank has obliged with CRR cuts and the bank continues to manage the loest deposit base in the country ith the status as largest bank int he country borne in measure by share of loan assets and the size of asset book  as well as the market share computations for the sector in both retail and SME/corporate banking 

However a future for India Financial Services may need to have a larger NBFC role designed aas per the latest policy documents or otherwise continue privatising bank franchises and allowing new banks with rural and priority mandates make the competition tougher whence sucha weak showing by SBI with only 5% growth in NII below INR 110 B for the quarter makes ita tough pill for the market to swallow. However, the current macroeconomic revival may let other banks pick up the slack and allow investors to ignore this quarter's SBI records while the markets again take a fact check on how good the India story is. 

Net profits for the quarter are INR 36 B ahead of estimates by more than 5% but the stock will drag the Banknifty in the current run with management guidance not being welcome. The year on year groth in profits does meet the benchmark of 30% at a 25% score bu tthat  is on a low base from underperformance after the bad loan cliff ensnared the bank

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Sun Pharma's provisioning costs of near half the $960 mln lawsuit with Teva underlined the informed investors ability to smell the rat and invest in trend winners like healthcare major Sun which has continued strong treating its pre result 690 as a bottom and dressing for the kill even as Cipla and others kjoined in the beautiful quarter when Pharma revenues set a new benchmark with an almost par for the course 40% increase in revenues on year despite not much groth int he domestic market which is also shaping up for a nice bloom out with only 300 drugs under price control

REC and Power Finance, Power Trading nad infra co Power grid remain value picks in the markets as NPA problems from SEB customers are sorted by state level federal intervention and TNSEB dues for one are restructured by the TN government in October

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State Bank of India results are also out today and Diageo's $1.5-2B opurchase of United Spirits for a stake of 52% from 18% of Vijay Mallya's personal holdings and UB group holdings in the company has also held out. Some may think twice about lending a hand to Telecom plays from Bharti to Idea as subscribers numbers dwindle again and a new one time fee upon us but I suspect most have been able to see the upcoming uptick in pricing for calls given the healthy consumer spend growth and a good festive season. ITC and IDFC will lead while ICICI Bank keeps the trend but Banknifty relies more on SBI today. 

Net Interest Margins at Chinese Banks are trending from 3 to 2% in the next three years leaving Indian NIMS among the highest in stable mmature markets except for some African nations which could not compete on the volme of credit. Thus there is an eminent segueway for DIIs and FIIs to be understanding about falling NIMS at PSE banks from PNB and BOB to SBI today hoowever further increases in NPA rates from near 3% levels are going to be inexcusable and unexpected for the market

Emirates and Etihad should be signing up Indian partners soon in the aviation story

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A 17% rise in revenues helped Bharti establlish some glowing recommendations for its 2013 and 2014 future even as a INR 7.7B Dividend Distribution tax and increased losses of INR 5.4 B from Africa stopped net margin to a measly 2.4%. Before the Indus Towers dividend and losses from Africa, the INR 202.73 B revenues bent a margin of over 5% excluding the INR 2.39 B from a court judgment in the company's(industry's) favor on interconnection charges. 

The company can probably not try and push pricing to Direct margins of near 50% as any self respecting industry might want but apparently hopes to regain pricing power if industry gives it a hearing even as the CCI has tightened up its regime and 'cartelisation' may not be elconme in any of its market. Telecoms, like its precursor in switiching technologies and business telecoms, seems to be hurtling towards, trundling dowwn to a depth of losses regime of pricing and profitability that has already taken out a few segments incl examples like Nortel and Juniper to Sycamore and others at the height of the Telecoms global roll out. 

Bharti did produce a viable model of profitability for the industry and would try to reclaim that leadership and is probably the best placed for that war with overall operating margins of 32% and Africa Op margins of 27%. it has been able to use pricing to maintain a virtuous cycle in its earlier avatars despite large Capexand resulting hit on Interest and Depreciation

On the other side of the globe, NASDAQ listed Cognisant cocked a snook at leading lady TCS with US revenues of $1.504 B matching TCS revenues of $1.509 B while overall revenues of $1.89 B continue to have a distinctly anemic spread outside the continental United States which remain the juggernaut strategy's focus in the IT services market even as Europe tries to review and rebuild sustainable busines s models for a unified Euroo led future out of the current recession

A revenue guidance of $7.34 B is definitely something to be proud of despite the 18% cap on margins and annual growth of 0% of Toplines eems to be a good enough benchmark for this company even as it disregards the 30% growth in profits benchmark we also concurrently keep. The resulting increase in attrition took data on employees attrition to 13% even as Financial Services continue to make a 42% share of pie and the US Financial services market remains lucrative yet now almost closed off to other Indian players including mid caps that may not be welcomed by larger IT strategy offices finally hoping to make a mark on consolidation and giving TCS consistent account wins till 2010.  Industry sales int he US and indeed those of retail lifestyle exports from India are likely to be hit by Hurricane Sandy in the Fourth quarter.

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Here it is, the Fiscal Cliff. Markets are soon going to realise the celebration of Obama and the general panic in the US markets are both in equal measures a global celebration and a classic over reaction that ticks off momentum in the other direction. 

If India denizens do realise the limiteed impact of the issues including the fiscal cliff's promised red splotched shores of recession then they can follow the DII traders into buying into the India markets even before the day is over but the correction is mandatory. ITC is up smartly, so is ICICI Banka nd there are the Mid Cap acts to follow the trend down which will present unique buying opportunities including Hexaware.

Biocon should be back in the mix except for the ill informed market sentiments in the areas of "focus on outsourcing" and "outsourcing is over" that seem to bring the edge back to the markets every other rally as unfortunately they remain unimportant issues esp to the business models of Indian companies succeeding in the US amrket and capable of building a domestic market franchise in their labs/sales departments

The markets should have probably continued up yesterday in New York and therefore here in Mumbai and we should still hope for a 6000 mark before the year i sover if the muted correction is followed by a good rally next week. Mannapuram and Muthoot have failed to pick up from Octoebr levels while NBFCs like M&M Fin nad Bajaj Fin did followon the good results and continued Tier 2 market development due to LIC Housing and Shriram Transport while Jet is backat invested and yet interested in investing category, Accumulation having begun earlier at below 340

Silver and Gold will probably weaken as Dollar surges back and the Rupee almost crossed over below 54yesterday but is hurt in early morning trade today towards its current LOWS of 54.6

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The Indian Rupee finally gave in to the teetering topsy turvy state of the confidence in the economy when the day's equity gains were not all carried into the closing and the currency went rooting for 54 levels at 1430 hrs , and now moves on to 54.1 toward the 5 pm close. 

MCX has received 700 applications for the equities segment that is tentatively launching before Diwali which would make clear signals for the concurrency between currency and Fixed income segments with equities quite germaine to the markets as the commodities experts have had considerable depth in Rupee rate discovery and providing a window for Crude Oil prices amongst other important commpodities like  Cotton and Gold where India's global following is also germaine. 

Exporters like Tata Coffee who are ramping up on their global sourcing commitments for Coffee and corporate Houses and exporters like Bharti Airtel and Bajaj Auto also could be supported in new FDI requests (outward) and add to the depth of the global Rupee trade which is yet limited in retail driven by excessive dollar speculation and yet dependent on key Oil and European and Chinese export volumes. 

The growing interest in Indian equities and Currency could be supported if measures to improve depth in the local Fixed ioncome/Gilt markets bear fruit as the RBI starts with consolidating various 10 year issues. Indian Bank CDS suffer from illiquidity despite the investors' knowledge of the 'real' investment grade rating of our banks as they get stymied by the triggers in the local currency and much more mature equities segments even as they load up on bank and infra QIPs from India. SBI trades at 220 bps and even ICICIBANK trades at 160 bps in the CDS market ( $160000 to insure $10 million of debt) 

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will it, won't it. A flavour thats missing from most mature markets and though SEA markets might still like to flatter JP Morgan and Goldman Sachs for their unlisted and pre IPO equity investments in these frontier markets and the shallower yet tepidly multi bagging SEA markets, the big moolah is in India and thats where most Foreign investors are headed again with the trade inds during Winter. The US holiday season may be a little marred by the disasters on East Coast with Hurricane Sandy causing $2 B illion a day New York City to buckle under with never ending losses ( of 20% of the daily GDP) we trundle forth after a big 'flat off' September and October as the Twowheeler sales data for October pours in. Bajaj Auto starts the day off with a 411,000 sales figure including a 50000 three whler sales across all markets topping its best performance in twao wheelers in October alone with 62,000 Boxers, 155,000 Discovers and 85,000 Pulsars electrifying the market and Hero 's resurgence may not stem its market share losses but definitely brings back volumes and margins to that business. Across the shores, Coke is powered by indian Festive season too, though Intel suffers from emptying assembly lines in the December quarter as Atom cannot ramp up to the steep increase in mobile form factors and Sales . Intel alone has lost margins of close to 10-15% in the December quarter to a measly 55% as Apple also takes a rain check on global volumes. india's smaller stories on the other hand have the robustness to climb to bigger budgets in Advertising, marketing and promotions and bring the house down with digitization also , ith a little official help hitting the required numbers in the metros and increaasing the known C&S market by almost 50% and accruing immediate subscription revenues of an additional 20% to the cable players and available new market share to Satellite players as well. 

Retail and Aviation FDI maybe robust stories as well as they seem to have started off on a surer footing though at the infuriating pace India is well cordoned foff for in global investment books. Earnings reports continue to underwrite a consumer and healthcare stock boom in this rally as the banks continue on robust credt growth after the additional provisioning also destroyed the banknifty members except the private banks

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Year on year Sales growth topped 33% at Powergrid from a INR 24.6B to INR 32.43 B  turnover in September 2012 and all added to the net margin for the company which suffered a image disaster hen UP MP and eastern states seem to have bitten off more than they could chew from the grid. Resultant investments in the Grid will also benefit this company as private grid investment ramps up on Infra projects getting to financial closure under the new regime with the government under pressure to deliver on their own policy

Powergrid profits jumped nearly 60% from INR 709 Crs (7.09B) to INR 1,125 Crores ( INR 11.25 B). Annual sales run rate for Powergrid at INR 130Bln is still likely to gro at 20% + and future capacity increases will release higher growth in the topline as PPAs get renegotiated from historic prices

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