Yes, we said nop one should pick this market and hope for a bull run at these levels and well it is still below 5200 but the June IIPs first and foremost are certainly a case for rejoicing. The IIP estimated at 5.5% after a 10 year low in May at the same rate, shot up to 10% in manufacuring with the weights in Mining and Electricity holding the IIP at an overall 8.8%.

China's IIP at its lowest stayed above 7% as Q2 GDP had come in at 9.5%. However the slowdown is much a projection of July and now August and the slowdown in India may be fiscally more a disaster as China runs a surplus on its year-to-date Budget spening. India has drawn 40% of its expenditure budget for the year but has mainted more than the 18% buoyancy in Tax revenues to maintain a fiscal deficit within the target range for a 4.6% year. China has a budget surplus of CNY 1.93 Tln for the same period. China is also switching monetary policy in the scond half citing loosening of controls on agri and small business lending as the way to blank out the lag effects of a tight monetary policy Staying on China, affordable housing also is one of the thrust areas

The question of China crops up in comparison of the trade as well as India's July trade deficit again crossed from $7.55 bln in June to $10 bln. India maintains a great $360 bln run rate for exports at the end of July against a target of $292 bln but a fiscal deficit of $100 bln and more could queer the pitch even as fiscal spending gets tighter from here, though without challenges from tax revenues as Results season continues to deliver much more than expectations and retail consumption is strong without the inflation having exited. Commodities trundling down at a fast pace even as the Dollar adjusts to a new rebalancing means that your and RBI's investment in Gold is going to earn it a handsome dividendwhile Oil and basic goods inflation finally starts to come down in the August data in a week or so, 

India's debt to GDP ratio now another piece of dataeveryone wants is still less than 80% and the External debt(ET) $320 bln is still more or less covered by our Forex reserves itself

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Forced eating is also an Indian predilection. After families create wilful aggression in their children thru making them eat at all times of inconvenience ( fropm the child's point of view, definitely..)  thus the culture of everyone trying to force buy picks on the market and push that index above a technical level and just ensnare a willing investor who will then be bankrupted without any fault of his. With no fundamental basis, the refusal of the indices tom move down is at best a shotgun response to analyst broker calls for positive investment , the FI brokers leading the forced sale this time. As usual it will be a distress auction sale before anyone learns better.

Anyway, the aphorism is far from a professional opinion. As a professional I would just say 4700 is a good level for someone to fairly discover good value and till then the 2-3 mid cap stocks like Page Industries and Suven Life are good enough as they have a good business model, a great market not going to collapse in front of them and not dependent on going away subsidies or other regulation an dpublic support like Energy. the stock market is not the right forum to fight for India''s rights. It is a moneyed investment based on a value proposition inherent in the price. Real estate is a big no  no, but the fundamentals of India's economy are just getting fine with the commodities starting to unwind down. It has not already happened and our inflation is still 9.5%So, stay aware that your buys are for a long term and there is a lot of uncertyainty that can come in large chunks into the market at any time. Not a good time to listen to your broker advising a buy. Try the broker telling you don't do any business  with him right now. :D

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The mint piece in the morning was thought provoking reading. The market response much on expected lines. Last time in August 2008 we saw $15 bln of portfolio flows leaving, this year only $2 bln is the net addition till june,. However foreign fund managers would have to perforce liquidate over the next few weeks as they cannot stay in emerging markets with so much pressure on the US markets for most investors and speculators know better than to start to early

Goldman Sachs has already upgraded India citing weakness in Oil and good performance etc

As advised in a piece at http://advantages.us Global markets' correlation is upward of 70% this time across Turkey, Germany, india, China, The Dow and even the MIB that can affect the S&P Performance and that of the Sensex thence. Be careful.

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Though Bangalore remains buoyant and probably by extension Calcutta and Hyderabad, I would posit that Metropolitan megatrons of Delhi and Bombay have quit on Foreign bank custom esp after the derivatives market wound down and limits on Swaps created business in Credit warned by RBI in June. Of course at both StanC and HSBC CIB business has grown Even Indian Banks have pointed to recent growth (HDFC Bank) coming from Tier II and Tier II towns ( which woul dbe towns of 1- 5 lacs pop) 

Stanchart produces $17 mln lower CB results

The India business of SCB and that of HSBC talked of static consumer banking income and/or loan book sizes. Asia's GBP 6.8 bln ($10 bln) EBITDA for HSBC and $3.1 bln for StanC boasted of almost 80% Hongkong contributions in the profits for HSBC and the largest 25% for StanC with India coming in at $451mln (Op Profits) for HSBC and $378 mln for StanC 

India business will grow to $1 bln in Op Profits for HSBC by 2013 Hongkong business for SCB matched the groups overall growth in NII as China renminbi business grew on the islands of Hongkong for both the banks  with the India  CEO for HSBC Stuart Davis cautious in lending over growing NPAs 

SCB's deposits grew by 9% for the 6 months ended June 2010 Operating exepnses  in CB grew to $174 mln at a faster clip with continuing investments by the bank Op profit from India at $44 mln speaks volumes about the bank's challenges in their largest market so far

 

Stanchart doubles Offshore WB, HSBC builds fee income worth $375mln

HSBC relied entirely on the CIB business to produce profits, wth $393 mln from Investment Banking and Loan income doubled to $78 mln as the business staying with the bank would be amenable to cross product business and insensitive to rate increases, being a part of the corporate's business to banks and not the relationship as lead bank still in many cases. The Advances for HSBC are a mere $4.2 bln on its total loan book of $6.1 bln or INR 25000 Crores 

StanC doubled its offshore income from Wholesale Banking to $185 mln but operating income (Topline is static for H1 2011 at$760 mln over $770 mln in the second half of 2010 WB assets grew in India by 10% and India remains an important market to break open for both the Emerging markets dominant banks

Hiring

Even with 15000 new jobs in Asia,  India is unlikely to be a big growth market for HSBC, SCB stepping in to wean away the common DNA as HSBC drags on consolidating RBS business and looks to India and China out of their Top 5 businesses. all in Emerging MArkets like Mexico, Singapore and Malaysia

StanC's India costs have been growing due to the extra hiring planned for the India business where HSBC will be managing 300 new ABN AMRO staffers in Bangalore alone StanC also delivered a much healthier cost income ratio globally 

 

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Though the day had been very busy with the debt deal and HSBC and other results, it was wierd to hear these otherwise likely connected new items I am still not full in with. Firstly, India is likely to lose most of its portfolio inflow runrate from 2010 to $14 bln according to the EAC report by Sh C Rangarajan and the other apparently, in the middle of a decent credit growth season that Indian and Brazilian CDs has been rising after the debt deal fell through. Seems like a steep one coming tomorrow. Watch out!

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Exports jumped again to $29.2 bln for June and Year to date numbers for Fy2012 inched to $100 bln for India as the trade deficit for June came to as low as $7.66 bln despite Oil imports of over $10.18 bln

The headline for this series remians unchanged after India's deficit jumped and RBI bumped up interest rates by 100 bps in the last two actions in this fiscal.   

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Even as PMI nos drifted to a 20-year low in June, SIAM is ready for a downward forecast as RBI rate hikes scare manufacurers into pre-emptive action to manage inventories. The retail consumption is not ready to slow down that much though year on year Auto sales are nearly down 20% for Maruti Suzuki. Maruti still managed to increase Sales month on month from 66000 units to 75000 units in July 2011, despite 11000 lower Swift sales from a limited rollout of the new model and 6000 lower sales of Dzire attribued to shifting of production plans to the old plant in Gurgaon. 

Based on reports from TVS, it seems likely that Hero and Bajaj will report higher sales in July as well as consmption remains strong in high volume categories. Based on 20% growth in 2 & 3 wheelers, the market is nto all tha t bad even as interest rates have already risen by 300% in retail and the new increases will also be passed on 3 year and longer tenure loans

June Exports for India grew nearly 50% to $29.2 bln beyond targeted growth to $300 bln for the year, Oil imports of $10 oodd bln though caused the deficit to rise just imperceptibly to $7.66 bln on $36.87 bln in imports

Ford and VW have been growing on new models in he global car companies and Hyundai fairly stable at 50000 units in the same month last year. Still4 wheeler sales for the country will not cross 150,000 for July

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