The rate cut to US securities is really as big jolt to the bulls across the globe as their indices growth is in tandem irrespective of the local issues. The Nifty could hold above the 200 day DMA and the bottom building will happen once it trades above 5830 level for next big leap. The crucial juncture is at 5778-85 level Bulls have to acquire and bears has to protect.
The big news is RIL will use 4G for its BWA, telecom fore ray into telecom with 25000 cr investment in next 5 years. The appointment of Mr. Vivek Lal former Head of Boeing Indian operations confirms its interests to focus on Disaster Management with safety and security. The set back to Reliance at this juncture is their Hydrocarbon business plans. The DGH rejects its 2 well discoveries and asked to resubmit their budgets.
The results declared BHEL, HDFC Bank, IDBI bank, Indus are showing decent growth in their profits and the NPA are not alarming. The retail banking operations of these banks are also providing good margin to their bottom line. BHEL lead consortium won 1600 cr nuclear power project along with Alstom.
The metrological department expects a normal monsoon for this year, but it is too early to confirm the progress
The burgeoning power crisis in India has given opportunity for many players to participate in the UMPP, now the power companies are facing in the fuel supply, especially coal shortage. Thanks to the environmental concerns for new coal blocks to be opened in the dense forests. The floods in Australia gave a boost to price hike but the scarcity is continuing for this commodity of black gold, globally.
The leadership change at Infosys be it Mr.Narayana Murty who reties by August, Kris will fill the gap but the current jolt from Mohan das Pai and Dinesh is a big challenge to Mr.Sibulal, the last leader of the founders to chair the top slot. The biggest challenge now for Infosys for next decade or so is lack of charismatic face to lead the 1.3 lakh human resources across the globe and build confidence not only on the capabilities to deliver but on the transparency and client confidentiality. The transition may bring down the stock to its yearly lows and may underperform than the indices. The stock fails to trade above 3030 immediately and float above 2930 for next couple of months may bring this giant to its size by cutting the extra premium, may trade at 15-18 times of PE, can place it close to 1800-2000 the first stop will be at 2580-40 range. The ability to win big contacts may stop the fall immediately with some good announcements otherwise the result is sour to taste and written clearly on the wall.
The strength of emerging markets like India are independently dependent not the bourses but on the capital flows and the M&As. The human capital and untapped natural resources are our strength but need some policy decision to unleash the potential. The Govt. has committed in its statements but a back seat due to the corruption charges. The Nifty is likely to consolidate in the broad range of around these 4500-6500 range for a longer period than anticipated due to the other headwinds like inflation, corruption, global slow recovery and the next big threat is the “value of Dollar” and the acceptance by BRICS any longer
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