Pre-Market Report - 04.06.2008

[K.Karthik Raja]

Bulls knocking on the door, time for some green ticks on the trading
floor
Jun 04, 2008

Stocks are expected to have a flat to positive open on Dalal Street
after
experiencing losses for the first two days of the week. Technically
the
market (Sensex) will continue to be listless until it crosses the
16,100
level and has strong support at 15710.

Overnight the US markets ended lower as investors sold off financials
on
concerns of credit crisis.Financials plunged on growing speculation
that
Lehman Brothers Holdings Inc will be forced to raise more capital led
a
slump in financial shares.After the markets closed,the bank denied
borrowing
from the Federal Reserve today and said the firm's cash holdings are
adequate.The Dow Jones industrials dropped more than 100 points losing
0.81
percent, ending at 12,402.85 and the Nasdaq ended down by 0.44 percent
at
2,480.48.Asian markets opened in green and might close in green for
the
first time this week.

Telecom sector will be in focus today as rumors are floating in the
market
about the possible merger between Spice Communications and Aditya
Birla
group's Idea Cellular. we very much feel that consolidation in the
industry
is needed as the competition in various circles has intensified.Bharti
might
look to bounce back after a bad day yesterday on the bourses. One of
the
pink papers reported that the Central government might introduce a new
Urea
policy soon to enhance domestic urea availability to meet the
estimated 350
lakh tonnes annual demand in the next 3 years. This might be bolsters
of
players like RCF which operates in this space.

Coming to the investment strategy in the current market conditions. It
would
be a good idea to avoid aggressive investing and long positions unless
we
see a decisive move the markets. IT and Pharma will always be safe
havens
for investors who wants to pump in fresh capital. However traders who
have
good risk appetite could look at Spice Communications,Ispat
Industries,
Divis Labs for a quick trade.

Market Close Box:

BSE Sensex 15962.56 -100.62
NSE Nifty 4715.90 -23.70
USD Rs.42.53
Oil Nymex $124.3

K.Karthik Raja