Inflation for week-ended November 29 is at 8% versus 8.4% (WoW). Yesterday global markets were also good. In the morning Indian markets also opened up strong but immediately after the opening Nifty and Sensex both were trading in red. Todays session was very volatile. We did see a sharp movements in the frontline stocks like RIL, SBI, Infosys. In the closing session markets recovered on the news of additional stimulus package for the Indian Economy. Fall in the crude price have really helped in the GDP of India. US job less claims hits a 26 year high. Jobless claims for the week ended Dec 6, was 5,73,000.

==>> Nifty closes above 2900 and Sensex above 9600 levels

As mentioned earlier that the Nifty chart is showing good strenght and there will be rally. Today markets opened on a strong note. Both Nifty and the Sensex opened positively and the rally contiuned. Sensex closed up around 492 points and Nifty by 144. Nifty made a high of 2937.3 and while Sensex crossed 9600 levels.Some follow-up buying was also seen in commodity stocks due to government's fiscal stimulus package, which was announced on Sunday. Strong Asian markets was another reason for today's rally. US markets futures also jumped up on hopes of tentative auto rescue package.
Volumes were also good as compared to yesterday. Nifty's cash volumes were Rs.9400 crs. and today it was Rs. 11500 crs. Few weeks back also i have informed me that the traders can bet on the reality and the banking stocks.

==>> Economic Stimulus package gives a boost to market

I am writing after a long time as was personally busy with my studies. Sorry for the same.

The las week has been very volatile. Global markets also showed some positive actions. Indian markets also saw the same reaction. Markets opened with a big bang on the much awaited economic stimulus package. Today on 081208 we again saw a bit of volatality. For the major of the session the Nifty and Sensex both was trading well above the 4%, but in the ending we saw a sharp decline. The Sensex which was around 350 points fell down sharply and closed down near 200 points only. It was majorly due to the news of fire broke out in reliance refinery. Ril which was trading well above nearly 2.5% fell down to just 0.5%. That was the only major news that pulled the Indian markets down.
Technically speaking, the markets have been in a very good mode. In the chart we can see that in the last week the Nifty has taken a very good support at the Trendline( marked by 1). We may see same movements in the future also for atleast 2-3 trading sessions. A dessive breakout above the trendline will take the Nifty above 3200 levels. Breakout below can take the Nifty again to 2700 levels. But looking at the chart positive movements are expected. RSI (marked by 2 ) has also been in the positive movements. Both the RSI and the Nifty daily chart has been moving in the same direction. Volumes (marked by 3) have also been good in the last few sessions. There is a positive trend in the markets.
The govt has been very busy through the last week, that resulted rate cut by RBI and economic stimulus package. This was followed up with a fiscal stimulus package on Sunday wherein its single most important move was reduction in the Central value added tax (Cenvat) by 4% across the board to boost demand. It also announced a Rs.20,000 crore additional non-plan expenditure to stimulate the economy. The aim of the fiscal measures is to bring back some life into the economy with a specific eye on boosting infrastructure growth, lift up the sagging exports, improve the beleaguered housing and auto sectors.
In the past also i have said that the Indian markets will outperform the global markets, as the Indain markets are not that much in red till now. The size of the stimulus package in India is not big coz India industries are not feeling that heat. Quaterly results of Oct- Dec will triger the movement further on.

==>> $800 bn new bailout program

Fed have yet again announced new Resuce program of $800 bn to unfreeze credit for home buyers, comsumers and small businesses. The Central will purchase as much as $600 bn in debt issued by housing finance companies. And $200 bn will give a support to consumer and small business loans. If the worry is that will this be enough to solve the problems created in the US. If the major Financial services provider like Lehman, US top bank like CITI, automobile giant GM, can go bankcrupt, there could me many more like them. Rumors in the market, that BOA can be the next in the line for the Resuce help from the US govt. US housing prices are still falling. There will be more job losses in US. China is facing severe export losses. US was the major clinets for its exports. The Finanacial crisis in US have dropped the imports form China. India have been saved from this masacared, because the exports is very small compared to China.

==>> Pakistan gets IMF funding....

Smartest Financial service house has got a support from the US Govt of $326 bn. Citi has received US govt guarantees of $306bn that will help it sell the sticky assets and irrecoverable mortgages on its books and $20bn in cash. The International Monetary Fund approved a $7.6bn bailout package to help prevent Pakistan from defaulting on its debt. IMF Financing will help rebuild its foreign-exchange reserves which shrank 75% in a year to $3.5bn.
Oil prices bounced back by around 9%. Gold too should its shine. Dow Jones closed above at nearly4%, as mentioned that the Dow has a good support at 7500 levels. Nifty too can touch 3000 levels in the bounce back.

Yesterday we saw a nosedive drop in the US markets. Dow fell down to its 5 yr low and Nasdaq at its 6 yr low. S&P fell the most at 11 yr low. Dow Jones has a support at 7500 levels, as we have seen the Dow bouncing back at the same levels after the 9/11 incident. US Umployement claims increased by 20,000. Crude fell down at 48$ per barrel.
Rupee is rushing towards 51.

==>> Inflation fears

I just read an article in the leading news paper named " Subprimes's dad? Deflation will be worst..."
Yes thats very true. Almost all the major developed countries have falled in the recession. Now its time for the Japan to get in to the news.
Japan's exports declined at the fastest pace in almost in seven years in Oct on back of global financial crisis. Imports climbed 7.4 percent, causing a trade deficit of 63.9 billion yen ($666 million), the third shortfall this year. Crude prices have been fallen and it is almost at the jan 2007 levels. This will give some breather to the oil companies in India. But the same could be a problem for the Arab countries, as they are tryin hard to keep the prices stable. They had cut down the production to keep the price at 100$ per barrel, but the price kept on falling as there is unexpected rise in crude inventory in US.
Sobha developers have reduced prices by 8% for their major projects. WOULD THEY BE ABLE TO SELL NOW?? This questions is still there in the minds of everyone. No they will not be able to... Genuine buyers will wait for atleast price depreciation by 35-40%. and that is possible. Mkt capital of DLF is around Rs. 9000 Crs. but their debt is around Rs.14700 Crs.
Rupee has been falling like crazy on the speculation that the FII's are in rush to withdraw their money from India.

The Govt has imposed 5% import duty on some iron and steel products and a 20% duty on crude soyabean oil. This will make the import costlier and will help the domestic industry sell their products without much of competition. But that will surely depend on the demand. Demand for the real estate are drastically down. This has lead to slowdown in the real estate and connected sectors with the same. Constantly in the Last few months this blog has been informing the reader that no investment should be made in the Real estate and Banking stocks, as these will be the worst performer in this year. Real estate prices have not yet come down. Off Diwali, the Developers have tried to stabalise the price, but seeing fall in the demand. Major steel companies have been reducing their output. Demand for the vehicles have also been coming sown. Honda have managed to sell some 230 odd Hybrid cars at Rs.8 lacs, which was previously priced at Rs.24 lacs.

RBI have tried to provide enough liquidity in the market.

==>> Mkts in a Roller coster ride

Yesterday Globally, equity markets were in the red India have been the worst performer in Asia. Indian markets tanked nearly 7%. Sensex closed at 9839 and Nifty closed below at 2938.
In the UK, home sales fell to a near 30-year low, due to the tight credit conditions. China reported the slowest export growth in the last 17 month. In Japan export fell by 10% in first 20 days in Oct.
Export duty collections in India dropped down by 8.7%. Cutoms duties down by around 1%.

==>> China unveils USD 586 bn package

The Sensex rose 571.87 points or 5.74%, to close at 10,536.16, after hitting an intraday high of 10,570.58. The 50-share Nifty Fifty gained 175.25 points or 5.89%, to settle at 3148.25. It has hit a high of 3161.25.
It was a spectacular session for the markets. Positive global cues led by announcement of China's USD 586 billion economic stimulus package, helped benchmark indices to remain strong. However, volumes have been quite tepid at around Rs 44,000 crore. Metal sector was the leader in today's rally followed by power, capital goods, telecom, oil & gas and technology sectors. Midcap and small cap stocks were also in the limelight.
China will unveil a USD 586 billion economic stimulus package by 2010 that will be spent on upgrading its infrastructure, on land reforms and social welfare projects. The package is nearly 15% of China's GDP versus that of 1.2% during the Asian Crisis in 1998. China's GDP growth slowed to 9% in Q3CY08 versus 10.4% in H1CY08 and the Shanghai Composite Index had hit a 26-month closing low of 1,706.7 last week.
Major Asian markets posted strong rally. Shanghai closed higher by 7.27% and Nikkei jumped 5.81%. Hang Seng rose 3.52%. Straits Times and Kospi were up 1-1.6%. Jakarta and Taiwan ended flat.

BARAK OBAMA elected 44th President. IT stocks will be a cautious thing to be played with. As Obama is not in favour of out source. And one of the major sector that has been outsourced to India is IT, and the Rupee also bounced back US stocks raliied up. Us markets have closed above 3% each. SGX Nifty trading at 3230 levels.
Yesterday Rupee bounced back sharply from its recent low. Bank rate cuts on the card. Experts see Oil price rate cut also.

==>> RBI moves helped regained Equity market

Rbi moves have helped India markets to gain around 35% from the recent lows. The cuts in the CRR, Repo rate and the SLR have bought the investors back in the markets. The stability in the global markets has also led to the revival in the sentiment. Yesterday Sensex opened with a strong note and closed above 10,000 mark for the first time in last 2 months. Sensex saw a sharp recovery of 5.6% or 550 points. Good recovery seen in the Reality Index and the banking Index. FII's were net buyers of Rs. 365 Crs.

Technically Nifty has taken a good support at the trendline. Yes it closed below the trendline for 2 days, but the smart recovery was seen after that. Nifty has also bounced back from the oversold zone.

==>> 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.