Crude falls to 110$ as hurricane 'Gustav' hits the coast and weakens! RBI will have Dr.D.Subbarao as full time Governor from 05.09.08.

US markets were closed yesterday on account of labour holiday. Our markets opened weak and traded in negative terriotory for most part of the day, but on the news that hurricane 'Gustav' weakened to level 2 category and has hit the coast of Gulf of Mexico, has brought the Crude prices sharply to 110$ intraday, which pushed shorts to cover in the last hour of trading, as a result, indices recovered most of the losses at the end of the day. The effect of the Gustav will be known after some time, as refineries have to re start production. Cooling of Crude is good news for equities in general and our markets in particular. There will be an initial enthusiasm today, to pull the markets up, which will be sold into as our markets shall be closed for 'Ganesh Chathurthi" holiday tomorrow (03.09.2008). Dr.D.Subba Rao, currently Finance Secretary has been appointed as Governor of RBI for a period of 3 years from 05.09.2008, as Dr.Y.V.Reddy the present Governor lays his office on attaining super annuation. The illustrious and one of the most effective Governors of RBI, who has seen the greatest raise of stock markets, GDP growth, Fall in interest rates. inflation and raise of the same in recent times, comes to an end by 05.09.2008. Markets, FIIs would have loved to see Dr.Y.V.Reddy to continue till the uncertainities on the global arena settle, by 2009 end or so., at least, would be missing him, his actions and punches while answering intriguing questions on various aspects of Indian Economy! However, let us hope that Dr.D.Subba Rao, who has varied experience since 1972, will continue the legacy of good governance and see that Indian GDP breaks into double digit growth during his tenure, leaving his own mark too.

Nifty futures have closed flat with 2 points premium, indicating indecisiveness on the trend. VIX has closed at 31.28 indicating lower volatility, as the volumes fell a head of a holiday. Markets shall trade in a narrow band today. Automobile sales numbers for the month ended are mixed, Cement figures will be known today. Both Exports and Imports are up substantially, which show the business environment is still encouraging. Rupee is firm around 44/- against dollar helps tech sector to post gains. Nifty faces resistance at 4414 today which is 20DSMA on any rally and support might come at 4255.20 (50DSMA). Asian markets have opened with gains and Singapore Nifty futures are currently quoting at a premium of 29 points should give positive opening for our markets inititally. It is to be seen whether nifty can close above August closing today at the end of the session, giving scope for further gains from 04.09.2008?

Range for the Day: Nifty might trade in a narrow range of 4300 to 4400 today.