Pre market Report on 29.07.2008

[K.Karthik Raja]

US markets to weigh on local sentiment
Jul 29, 2008 |

The Indian markets are headed for a lower open as stocks in wall
street
plunged sending in the negative signals to Dalal Street. However we
do
expect a fall of nearly 2 percent in the domestic markets.

Wall Street saw a sell off in Monday and financials are the culprits
here.
The Dow dipped more than 240 points heading back in to the bear
market
territory.The shares of financials dipped on concerning comments by
IMF
about the bleak housing market, which triggered selling in stocks like
Citi
Group. The Nasdaq also dipped by nearly 2 percent as technology stocks
were
not spared in today's carnage. Nikkei opened in red and dipped more
than 2
percent in the first hour of trading following the US markets.

Meanwhile the RBI is expected to raise its rates at July 29 review by
nearly
25 basis points in a measure to control inflation. Any bigger hike
than the
25 basis points might trigger a sell off in the banking and realty
stocks
and what we have seen a few weeks ago might repeat. The engineering
sector
stood out from the other sectors in Q1. The numbers from L&T and BHEL
have
been really pleasing and the sector looks well poised to take
advantage of
any bounce in the economy.

We might see some profit booking in the tea stocks today where as
Sugar
might remain upbeat as the prices are firming up in the international
markets. Polaris has seen very good price and volume action as the
stock
vaulted more than 23 percent and something is definitely cooking in
this
counter. We have seen some second rung speculative counters coming in
to
action yesterday as lot of operator driven stocks have scored gains
yesterday. So overall a bad day for the bulls unless Mr. Reddy tosses
up a
surprise by keeping the rates unchanged, which is a distant reality.

Previous Market Close:

BSE Sensex 14349.11 74.17
NSE Nifty 4332.10 20.25
USD Rs.42.23
Oil Nymex $123.2