Inflation at 11.99% but selling continues on Dalal Street which make 2nd weekly closing below 4000 level!

Nervousness on Dalal Street continued a head of passage of Bail out package by US House of Representatives and inspite of inflation taming to 11.99% profit booking cum bearish ness continued which resulted in yet another weekly losses, thus, finally Nifty closing below 4000 levels firmly confirming the trading range shifting to 3500 to 4000 as feared. US markets have closed with losses on friday and later in the week end the package is passed by House of Representatives. CBOE index rose to 48.4. The implementation of the package and how it will help in recovery of the financial system are to be watched. The actual system is 60 trillion $ and the bail out package being 750$ shall be pea-nuts if the problem is deep and wide spread. US president's signature to Indo-US deal cleared by the House Representatives is still to be done, thus, the accord is put on hold by India, though the secretary of state was here on saturday and sunday.

 

VIX has closed at 35.10 and Nifty futures have closed at 20 points premium on friday. This is again a short week of trading for our markets on account of trading holdiday on 09.10.2008, being the Vijaya Dasami. 5DSMA now is currently placed at 3905.11(Nifty) & 12828.07(Sensex) will be the initial resistances on any attempt by bulls to take the indices up, rupee being held around 47 levels against US dollar, SEBI's meet on review of PN guidelines introduced in last October 2007, shall have influence of FII flows and sentiment from tomorrow. Results of tech sector and other export oriented sector, should have naturally been benefitted with depreciation of rupee by 17% in the last 3 months against US dollar, but, most of them have hedged around 41-42 levels, as no body expected this steep fall, inspite of cooling of Crude and other commodities and also fall of US stocks and markets. FIIs are reported to have sold 9$ billions so far in the last 9 months during this year, and might continue to unwind the PNs to meet dead line of 31.03.2009.

 

Asian markets are trading in negative territory, Singapore Nifty futures are currently quoting at a discount of 

115 points suggest weak opening for our markets too initially. 3814.26 is the 40% fall from its all time peak of 6357.10 recorded on 08.01.2008, should be held on closing basis dailly for any base building for expecting reversal of the bearis trend. Failure to sustain this level, shall push the markets into further deeper bear phase in the coming weeks and months to much lower levels like 3646.40 & 3006.67 where the bear market could end.

 

Range for the Week: Nifty might trade in the range of 3600 to 4000 during the week.