Our indices opened with posititve gap and due to short selling breached 31.03.2008 lows, and by mid afternoon, when asian markets closed firm, and European markets opened in positive territory, short covering and fund buying lifted the markets from lows, finally Nifty ended flat to marginally positive and sensex closed marginally negative. Trading community abstained from trading on 01.04.2008, protesting the change in treatment of STT in this financial year which eats in to their margins, and threatens their survival, lead to low turnover, inspite of huge volatility. Government of India has announced several measures to increase the supply side of commodities, which immediately effected the commodities markets to crash and some commodities have hit lower circuit. This action coupled wtih steel ministry asking the industry to voluntarily co-operate to reduce prices, should show effect on steel companies shares today. The effect of these measures on containing inflation or bringing it down will be known after few weeks, but markets always discount the future, so banking and financial stocks to do well from here on.
US markets had spectacular rally overnight, on the news that UBS and Lehman brothers are raising fresh capital to shore up their balance sheets, and the march manufacturing data shown marginal improvement over february, enthused investors to lap on to equities that some calmness is returning to the US economy which is threatening to have one of its worst recession. Whether it is a one day affair or a fresh rally began will be confirmed if follow up buying emerges for few more days. Singapore Nifty futures are trading with 200 points premium currently, and gap up opening for our markets is a foregone conclusion, as there would be short squeeze, since many players are short on 4800, 4900 & 5000 calls of current series, expecting further down side. How Nifty behaves around 4950 to 5050 level is the important observation which gives clue for future course of our markets.
Range for the Day: Nifty might trade in the range of 4750 to 4950.
Strategy for the Day: Go long on April Futures above 4825 with a stop loss at 4770.00 duly hedging with 4900 put option.
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