Pre-Market report on 25.03.2008

[naresh0...@yahoo.co.in]

Stocks looks cheaper but selling goes deeper

US Markets continued where they left off on Thursday. Dow Jones
jumped
on
positive housing data and JP Morgan's increased bid price to buy Bear
Stearns
ending the day with a gain of 187 points at 12,548.64 and Nasdaq shot
up
68.64 points to end at 2,326.75. Indian ADR's Infosys, Satyam, Wipro,
ICICI
Bank, HDFC Bank gained more than 8 percent. All indicators are
pointing to a
bottom formed last week on the Wall Street although it is too early.
Now a
slew of positive data will keep the street rocking with huge short
interest
favouring the bulls.


Japanese markets jumped on excellent global cues and weak Yen. The
Nikkei is
trading at 12,658.73 up 178.64 points.


Whom to blame?


We believe FII's are "opportunists" and do not hesitate to resort to
any kind
of carnage when they decide to leave. Though not many have wrapped up
their
shops in India the situation turned disastrous for many of them back
home and
they have no choice what so ever to sell-off their holdings even for
a
huge
loss. Domestic Funds are just watching the show and so are retail
investors
with the major reason attributed to lack of funds and global credit
crisis
(much hyped).


When will this end?


As the US Credit markets slowly settle down the fund selling will
cease and
when the domestic funds realize the value in the market, there will
be
a
decent recovery in the midcaps. Till then the broad based rallies
will
be
rare with the Sensex and NSE Nifty(manipulated as ever) trying to put
up a
brave face.


What should the government do?


The government should levy the required taxes on the FII's and leave
the
retail investors. At the same time the government should encourage
the
public
to invest more in equities.


Markets are likely to move up today but expecting an end to the
midcap
sell-
off is not an easy call and completely depends on the FII's. Nifty is
unable
to catch up to the gains when compared to the Sensex. A short squeeze
is in
the offing and if not in the next 3 days it will be never. Next month
roll
overs are at a low and many do know that stocks cant go to zero.


Indian Economy has a long way to go and the current slow down coupled
with
panic selling will soon subside.


Market close box :
BSE Sensex 15289.40 294.57
NSE Nifty 4609.85 35.90
USD Rs.40.34
Oil Nymex $100.8