Our markets traded in narrow range oscillating between positive and negative territory, factoring in the results of banking stocks ICICI BANK, HDFC BANK & L&T etc., and finally closed with marginal gains, amidst volatility due to roll overs picking up to next month series. Nifty futures have closed with just 5 points premium indicates 'wait & watch' mood of investors ahead of an important event 'RBI Policy statement and action on interest rates etc., VIX closed at 54.06 the highest, ever since it is introduced to measure the volatility of our markets, suggests heightened volatility today and from here on. US markets have seen big sell off overnight, as crude started raising once again on supply concerns, and dismal performance of financial stocks like 'Merrill lynch". Nifty has closed below 5DSMA which now stands at 4358.88 and might take support at 4101.48 (20DSMA) in case of huge weakness. Singapore Nifty futures are currently quoting at 94 points discount indicates minimum 2% gap down opening for our markets at the opening. Asian markets are trading in negative territory following US cues.
RBI will announce its decision on interest rates at 11.00 a.m. and Dr.Y.V.Reddy will explain the policy stance later in a press conference generally around 12 noon, will be watched keenly by FIIs and market players, to read the cues on GDP growth, fiscal situation, etc., which will be priced in the interest rate sensitives like, banks, financial companies and real estate sector stocks. Dr.Y.V.Reddy's tenure as Governor comes to an end by 30.09.2008, unless he gets an extension, and his views will be taken with rapt attention, since he has fixed a 5.5% inflation target for this fiscal, which appears to be impossible to achieve in the current scenario, and added to it, he might not be there to achieve it, since he would leave his office half way through.
In my opinion, RBI may leave both CRR and interest rates unchanged, but will give a statement to act inspite of a policy meet, anytime, as situation warrants. The M3, is down, and credit growth is also moderating, and GDP growth also is affected due to higher input costs, crude prices, inflation, and interest rates. Yesterday's report from RBI indicates that it aims to achieve growth, while taming the inflation. Public Sector banks profits are already down for this quarter, and Vijaya Bank has posted even loss, which makes difficult for them to raise additional capital to meet 'Basle Committee' capital adequacy norms by 31.03.2009, with bad financial performance. Anyway we will know every thing during market hours.
Range for the Day: Nifty might trade in the range of 4150 to 4400 today.
Strategy for the Day: Close long 4400 put at the opening and book profit & Buy 4100 calls for intraday trading.
RBI will announce its decision on interest rates at 11.00 a.m. and Dr.Y.V.Reddy will explain the policy stance later in a press conference generally around 12 noon, will be watched keenly by FIIs and market players, to read the cues on GDP growth, fiscal situation, etc., which will be priced in the interest rate sensitives like, banks, financial companies and real estate sector stocks. Dr.Y.V.Reddy's tenure as Governor comes to an end by 30.09.2008, unless he gets an extension, and his views will be taken with rapt attention, since he has fixed a 5.5% inflation target for this fiscal, which appears to be impossible to achieve in the current scenario, and added to it, he might not be there to achieve it, since he would leave his office half way through.
In my opinion, RBI may leave both CRR and interest rates unchanged, but will give a statement to act inspite of a policy meet, anytime, as situation warrants. The M3, is down, and credit growth is also moderating, and GDP growth also is affected due to higher input costs, crude prices, inflation, and interest rates. Yesterday's report from RBI indicates that it aims to achieve growth, while taming the inflation. Public Sector banks profits are already down for this quarter, and Vijaya Bank has posted even loss, which makes difficult for them to raise additional capital to meet 'Basle Committee' capital adequacy norms by 31.03.2009, with bad financial performance. Anyway we will know every thing during market hours.
Range for the Day: Nifty might trade in the range of 4150 to 4400 today.
Strategy for the Day: Close long 4400 put at the opening and book profit & Buy 4100 calls for intraday trading.
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