After weak to flat opening on tueday, the indices had moved strongly due to huge short covering coupled with long build up as Crude has fallen to 105$ after a long gap of 5 months. Falling of crude prices will help in reduction of stress on fiscal situation domestically, apart from helps Oil marketing companies to post better performance. The news that the hurricane 'Gustav' has crossed the coast and there was no damage to oil rigging and refining areas also is cheered by markets, though the resumption of production in that area shall take some time. Nifty has close above 20DSMA levels which was offering some resistance for the past two weeks and now its way to challenge 100DSMA currently placed at 4560.29. US markets were just flat to negative on 2nd and 3rd being concerned about the domestic problems, cannot offer any clues to our markets today. VIX has closed at 30.45 on tuesday. On wednesday our markets are closed on account of Ganesh Chathurthi holiday! Today when they open few domestic developments might influence the trading pattern.
Tatamotors has decided to shift the Nano plant from Singur, along with ancillary units. West Bengal Governor took initiative to sort out the dead lock between Trinamool Congress, Government and Tatas in a meeting scheduled tomorrow 05.09.2008. Indian Industry leaders like Mukesh Ambani, Sunil Mittal and N.R.Narayana Murthy, have expressed support to Tata's concerns. FDI and Investment into mega projects in India will receive a set back if Tatas are forced to close the unit. Though the protest from Trinamool Congress to protect the 400 acres of Agricultural land is genuine, in the larger and long term interest of food security of our country, W.B.Government and other stat governments acquire or allocate fertile Agricultural lands is against national interest. Industrialisation is desired, but not at the cost of Agriculture which is the main stay of 70% of population of India. It is forecasted that in the coming decade there will be shortage of food, with rapid industrialisation in emerging economies.
The news that Indo-US nuke deal which is before NSG, is in geopardy, as some of the members are against giving blanket approval to India, in the absence of our country signing NPT and CTBT. There is a news item from US which leaks information that US reserves the right to stop supply of fuel anytime, if India goes for test, is causing political ripples in New Delhi. The outcome of this issue and any possible fall out at Centre etc., are to be watched carefully. The intraday swings on either side are hazardous for traders too, and now that Crude corrected more than 25% from its peak, the volatility has set in its price. The inflation data will be released today after market hours will have their effect tomorrow, However, some profit booking can be expected today initially or at the end of the session.
Range for the Day: Nifty might trade in the range of 4420 to 4620 today.
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