Monday, June 8, 2015

morning thoughts...

The markets remained weak last week with a test of 8100 levels and calls unwinding at 8050 levels with addition of call writers seeking some more weakness in coming sessions.
Technically the structure of markets looks weak in coming sessions with a probability of 8050 - 8000 on the lower levels.
However individual stocks and space needs to be tracked and will be fruitful in coming sessions.
Public sector banks are required to lend to the farming community at subsidized rates under the priority sector lending rules of RBI. Reportedly, Indian banks have a total farm loan outstanding of Rs 7.8 trillion as on April 2015. The farm loan target has been further hiked to Rs 8.5 trillion in the Union Budget 2015. But the possibility of crop failure in a drought year increases the risk of farm loans turning bad. This is especially true as the government steps up populist measures such as farm loan waiver and rescheduling of loans. While this might seem to be inevitable, statistics paint a different picture. Farm loans have been growing in double digits even as agricultural growth has been in low single-digits. Therefore instead of just focusing on providing funds, the government should help the farming community improve its crop yields through better and innovative cultivation techniques. Unless these real issues are addressed, the banking sector will continue to remain vulnerable to the vagaries of the weather. 
Coming to the commodity markets bullions and energy looks positive with a sell in base metals

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Monday's wealth gains

Sell indusind bank , tata motors, tata steel
Double bumper buy Cairn 180 pa
Buy sparc , bhushan steel
Sell nifty and bank nifty on rise
Buy axis bank 560 ca , upl 530 pa