After a stunning rally on 15.04.2008, Nifty was slightly volatile yesterday(on 16.04.2008), though opened gap up, profit booking around 50DSMA levels of 4950 was noticed, finally ending marginally positive. US markets had a strong rally overnight, on the back of doubtful financial sector stocks, announcing better than expected results, inspite of some weak economic indicators, should help our indices too to open strong. Asian markets are trading firm, and Singapore Nifty futures indicate positive opening due to the 70 points premium at which they are currently trading. Whether our indices clear 50DSMA 4949.84(Nifty) & 16618.97(Sensex) today and close above it, is to be seen in view of mixed signals / events to unfold today and during this week end. VIX has gone down by 7% to 27.94, brings down volatility, and indicates a directional move is in the offing.
Positive News: Global markets are firm and buying in index heavy weights seen on every dip/weakness. Results from corporates are in line with expectations or better than expected. Stock lending and Borrowing shall be introduced from 21.04.2008 on indian bourses, which makes our markets join the practice of developed markets like US markets, and infact, the settlement being T+1 here, as against T+3 on US bourses, makes our markets more efficient, in fact the best in the world. The scheme should create liquidity and participation interest among investors and institutions, is good for our markets in the long run.
Negative News: Crude touched 115.07$ yesterday and threatening to go upto 120$. This is mainly due to weakness in US dollar, Indian crude basket touched 106$ already, make ONGC and Oil marketing Companies suffer heavy losses, as they are not allowed to raise prices, since they are under government control. Any raise in Petrol and Diesel price will push the inflation further up and effects the manufacturing sector and entire economy. Raise in commodities prices world over, have imported inflation to our economy too and 7.41% reported last week, is way beyond tolerable threshold of RBI and Govt. While both have started expressing concern, taken few measures and shall take further measures, as they cannot be mute spectators of this 'devil' raising its ugly face continuously, as it hurts every one including the ruling governments, which face by elections, mini election and may be general election too. Unwinding of Participatory Notes issued under subaccounts of FIIs registered, who do not wish to regularise, who are given 18 months time, when the issue was settled by SEBI during October '2007, is putting pressure on our indices, at every raise, which is evident from FIIs selling figures in 2008 so far.
Events which influence the markets from now on: Inflation data to be released today, whether it breaches 7.41% reported last week! Results and guidance of other Tech majors viz., CMC, Wipro, Satyam Computers and TCS; Expiry of April Series on 24.04.2008, Results of Oil Sector majors viz., Reliance Industries, Ongc etc., RBI Monetary policy meeting Scheduled on 29.04.2008 and finally FOMC meeting on 30.04.2008.
Range for the Day: Nifty might trade in the range 4750 to 5050.
Strategy for the Day: Buy 5000 puts on rallies and 4700 calls on weakness for intra day trading.
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