==>> Rs. 2.25 lacs injected by RBI by way of rate cuts..

Today market opened on the positive zone on back of rally seen in the US markets after the announcement of the 1% cut in the prime lending rate. China, Hongkong also announced the similar rate cut. Japan's Nikkei fell down by around 5% after not so expected rate cut. Japan announced 0.20% rate cut.
Indian markets opened strong with a gap. Inflation declined for the 5th consecutie week. Inflation for the week was at 10.68 %. Experts see inflation falling down till a single digit figure. Gold has been some selling pressure. Crude prices fell down again, worrying low demand from the emerging economies. Global markets have been in the green since last 2-3 days. Indian markets have misssed that rally on Thrusday. Sensex opened in the green with a gap and sharply rallied around 700 points. Market men ran to cover their shorts, that lead to rally 14% rally in the reliance. Hdfc & JP +17%, ICICI Bank +15%, Tata steel & tata power +13%...

To fight with the liquidity crisis RBI has cut down Repo rate by 50 bps, CRR by 100 bps & SLR by 100 bps. The cuts in the near past will inject round about Rs.2.25 lacs Crores into the system.

==>> Largest gain in Mahurat Trading

WISHING YOU A VERY HAPPY AND A PROSPEROUS NEW YEAR....

On Tuesday Indian markets saw a largest gain in the Mahurat Trading. Sensex rallied nearly 500 points to close above 9000 levels. Nifty closed at 2684. On Monday we saw a sharp recover in the markets. Reliance made a new low below 1000 but saw a sharp recovery. Yesterday in the mahurat trading reality index shot up nearly 10% followed by good rally in metal, power and capital goods. Valuations of the frontline stocks are very attractive. investors should invest nearly 25-30 %. Rupee is having a hard time now. Its trading below 50 per dollar. Crude prices are still not getting firm even after OPEC planned to cut down the production. Gold prices were firm on back of buying due to Dhanteras, but the prices will come off after some weeks.

US markets opened up firm and rallied up sharply nearly 900 points in Dow on back of Fed meeting which is shedule to meet on Thrusday. Traders belive that the Fed will cut rated by .50 basis points.

==>> Argentinas the next on the brinks

In the last few months there have been no stopages of bad news in the market. Americas financial sector crisis leading to many financial companies going bankrupt, take over of some banks. These crisis were not only seen in Amercia, but other countries also. But now the scenarios is changed a lot. Now the problem is not with the financial companies, but the COUNTRY itself....... Ireland running out of the cash reserves, it has debt 10 times more then its GDP. Problems are luring around Pakistan too. Now its time for the Argentina. The government planned to seize $29bn of private pension fund to service its debt obligations, fearing that the country is heading towards its 2nd default in 10 yrs.

Crude prices have fallen down to $66 per barrel, but the goverment is not planning to reduce to cut down the fuel prices in India. This is a provision to save the bleeding oil companies, who are finding it difficult to survive below the increasing subsidy burden. Yesterday we saw a major round of selling pressure in the banking and the real estate sector. Many companies are at their 52 week low. Real Estate sector is still facing heat due to very less buying intrest in the market. Builders are finding it very difficult to attract buyers even after providing them with free beeies, interiors, waiver of stamp duty and registration. They are facing liquidity problems as the banks also fear from lending money to them. Many companies are seeking foreign funds.
Gold prices have fallen down due to high price and lack of buyers. Gold prices will see a further fall in the prices. When saw a rally in the gold prices with the crude rally. Crude touced a high of around $145 per barrel and gold nearly Rs. 12000. But the crude prices have halfed to nearly $66, but gold prices are still at the top. Crude prices saw a fall in the fearing fall in demand from the developing countries. Gold should also see some further fall in the demand and the prices...

==>> Nifty support at 3000 levels

For the week ended 17/10/2008 Nifty closed at 3074. Previous weeks close was at 3279. In the last week Nifty made a high of 3648 and faced resistance at the 200 moving average at 3659. In the weekly chart, Nifty is trading well below the over sold zone. Nifty has a support at 3000 levels. It's gonna be a pshycological levels, where we will definately see good short covering. Sensex has a support at 9500 levels.

Korea govt agreed for a $130-b to rescue itself from the global recession.

==>> Comparision between US and Indian markets

US markets are at the brink of Recession. There are multiple problems in the US. Like Housing led, over leveraged, falling asset prices and many more. Consumer confidence is at a multi decade lows. GDP may turn to negative. Recovery in the US markets are likely to be so fast. It will take a long time to coupe up with all the pains it has suffered. According to me in India i dont think so that the pain is as severe as in the US. Indian banks have very less leveraged levels. The US financial firms have over leveraged positions by around 30-40 times. RBI should come up with more CRR cut to have significant liquidity in the market. This in trun will help the cut in the intrest rate. Inflation rate have also cooled off from the recent high to 11.44% for this week.

As mentioned in the morning note that our markets will bounce back. Sensex after pluging down nearly 650 points in the open trades. For most of the day sensex remained at the same level, but rallied sharply in the closing hours as soon as the inflation data was released. Inflation for the weekend stood at 11.44%. Indian markets will take support at these levels. We may see some consolidation here. In the Extreme case sensex may fall down to 9500 levels, thats an extreme case , acc to me.

==>> Indices tanked with dry volumes

Volumes were very dry yesterday. NSE cash volumes were Rs. 9748 Crs. as compared to Rs. 11845 Crs. the previous day. Volumes is BSE cash also saw a drop at Rs. 3581 crs. as compared to Rs. 4252 crs. Finally after the trading hours on Wednesday, the CRR was cut by 1% point to 6.5%, that will leave free Rs.40000 crore for lending. Previous rate and yesterdays rate cut would add to Rs. 1.25 lakh crore liquidity in the market. This will again help the financial firms to lend more money to the cutomers. SEBI has tightened the exposure margin norms in the derivatives segment. The cost of keeping the opening positions have gone up. This may prompt traders to square up the positions as they may have to shelve more for their open trades.

Nifty closed at 3338.4 after making a high of 3518. SGX Nifty trading at 3125 down nearly 200 points. Dow closed at 8577.91 down 733 nearly 8%. S&P closed down by 9%. Hangseng trading down nearly 7.5%, nikkei down by 9.71%.

==>> Indian MF's faces the heat of redemption

In the morning session, Indian indices openend and surged sharply but ended up lower on back of profit booking. Nifty closed lower at 3518 and Sensex clsoed below at 11410. Nifty has a resistance at 3700. Indian MF faces the heat of redemptions nearly Rs. 25000 has been redeem from the MF's in the month of Oct. Investors withdraw nearly Rs. 46000/- in the month of Sep.

US govt provides $250bn capital support banks. Us government will spend $250bn to take stakes in thousands of banks and financial firms. This step could probably help banks to lend more to the consumers. This could mark a new age in banking. $125bn will be provided to top financial firsm like Citigroup, Goldman Sachs, JP Morgan chase, Wells Fargo, ML, MS, BOA, Bank of NewYork. Dow Jones recovered in the closing session from the lows of around 210 points. Dow closed marginally in red by 76 points but Nasdaq Closed below, around 3 % nearly 65 points. Nikkei surged more than 14 % as the Japan govt unveiled steps to help its financial markets. Australian govt infuses nearly $7.4bn to boost economy, to protect it from global financial meltdown.

Dow up around 11%, Braxil index up by 15%. Nikkei up 13%, Hangseng up by 4%....... WHERE WILL OUR MKTS GO?????

Nifty has a good support at 3300 and will face resistance at 3500-3750 levels.

Today indices surged around 5-6%. Nifty opened at 3272 surged up sharply to make a high of 3510, closed nearly at the high of 3490. Sensex closed above at 11309.90. As i have mentioned that the Nifty has a good support at the -61.8% retracement level. On friday Nifty closed at the same level. Today it boucned back from the same level. In my last blog i have mentioned that the chart indicates that there can be bounce back, as there is a formation of the doji pattern. and the markets have entered in the over sold zone. The meeting that was held between the G-7 countries have gained some confidence in the markets. Governments across the world have moved on to help the global banks with multi-dollar bailouts.

==>> Global meltdown continues

Today Nifty closed below at 3513 after making a low of 3329 in the intial opening session. Just after the Pre opening session at 12.15 indices plunged around 8.5%, but smartly pull backed immediately. Sensex made a low of 10740, but managed to close above 11000, at 11328.
Technically both the Sensex and the Nifty chart looks good. In the Nifty chart we can see a hammer like pattern and in the Sensex its a Doji like pattern. Both the Indices chart shows that they have entered the over sold zones, But the global market meltdown will cover all these things. As Iceland and Pakistan may be declared bankcrupt as there is serious liquidity crisics. Ruppee trading around 49 as compared to per dollar. Gold hitting a new high as the traders see that as a better alternative. These may bring out markets down. But Indian economy as in that bad position as compared to the other global economy. We may also see some bank and real estate companies raising money for their survival. As their is serious lack of buyers in the real estate. If the builders could not attract customers till this year end, then there could be heavy correction in the same. Correction could be around 25-30%.
Dow down -7% . Sgx nifty trading down 260 points. Nikkei down 10%. Hangseng down 7%.

==>> ON THE LIGHTER SIDE !!

ON THE LIGHTER SIDE !!
In the Year 5008, yes not 2008 but 5008, a little girl asked her father - "Dad who were stock brokers?"Dad replied, "Some 3000 years ago these were human like creatures, they were so many and suddenly some kind of environmental change happened, their fossils are found with some numbers with graphs, marking 21000 and then 9000. Scientist interpret differently ,some says it may be temperature changes , some says it may be density of the gas they use to inhale for living dropped below 9000 from 21000.Nobody has a clear view on why they slowly became extinct "

==>> Nifty major support at 3500 levels

In the US markets, the Dow Jones closed below the psychological 10000 mark for the first time in 4 years on fears that the credit crisis is spreading its tentacles across world markets. The index however pared its massive losses in the final hour of trade.
The Fed tried to ease Wall Street's pain by saying that the 28-day and 84-day cash loans being made available to banks will be boosted to $ 150 billion a piece, effective Monday. Also loans that will be made available in November to banks also will be increased to $ 150 billion each.
That makes a total of $ 900 billion in credit potentially outstanding over year end. But the US markets didn't find much respite and slumped.At closing bell, Dow Jones ends down 369 points, S&P 500 sheds 42 points and Nasdaq ends down 84 points.

The carnage is till not over. We can feel the heat globally. The German govt bailed out a big property lender. South Korea said it will dip its forex reserves to lend banks.Europeran stock markets tanked 7%, while among the Emerging mkts Russia suffered the most, falling 19%, Brazil & China tanked by 15% and 5% respectively.

Indian ADR's are also sharply down, Sterlite -17%, Satyam -14%, MTNL -13%, Tmotors & Hdfc Bk -9%.

Oil has breached 88$ per barrel, but the impact is not seen in the Indian markets as the Re is also slidding down. Re made a new low of Rs.48 as compared to 1$.

Cash Reserve Ration (CRR) has been cut by 50bps. That will release Rs.20000 in the system. The last time RBI cut CRR was way back in June 2003. The actual impact on liquidity will be negligible coz Rs.17000 crs. will be sucked out of the money markets by Friday courtesy govt bond autions.

Technical Speaking Nifty has a good support at 3500. Acc to the Fibonacci theory from the High of 6357 & a low of 4448, 3500 levels is the -50% retracement level. Nifty is also getting in to the over sold zone.

==>> Nifty chart for 03/10/08

==>> India Outperforms

Yesterday Global markets were felt the tremour in the US markets. US markets which closed negative 770 points in Dow had a tremendous impact on the other markets as the $700 bn bailout was rejected. Hangseng opened negative. Indain markets to felt the same feeling in the early opening session. Nifty made new low of 3715.05. Last time we saw Nifty was in 2007 April. Sensex's low was 12153. This level we have seen in 2006 Sep month. Rupee depreciated to to make a low below Rs. 47 per dollar. But all these reasons did not stop Indian brousers to pull back soon. Nifty closed above in green at 3921 with a gain of 70 points. Sensex gained 265 points to close at 12860.
On September 17th I have mentioned that, though the current scenario in US are week, still the other emerging markets will definataley outperform the US markets. The bounce back will be very sharp, but not in the short term. Nifty has a good support at 3750. In the Nifty chart we can see that the Nifty is trying to take support at the Trendline in the last 2 days.