Pre-Market report on 17.03.2008

[Sukumar]

Riches to rags ; Bear Stearns goes to
dogs
======================================================================
What a pity !! History was re-written in the early hours of Monday
morning
Indian time when JP Morgan agreed to buy Bear Stearns at $2 per share
or USD
236 millions in what may be called a stunning collapse for one of the
world's
largest and most popular investment banks. The stock was trading at
$58
before the start of trading on Friday. This is definitely a set back
to the
investment world given the history of Bear Stearns. Now eyes shift to
other
global investment majors with Lehman Brothers expected to be the next
target.
Fed approved a cut to its lending rate to financial institutions to
3.25
percent from 3.50 percent, effective immediately, and created another
lending
facility for big investment banks to secure short-term loans.

Asian markets took a beating in the initial trades with Nikkei trading
down
390 points at 11,851, its lowest in 3 years from April 2005. Japanese
yen
continued to kick US Dollar out of shape, currently trading at 97 yen,
a 12
year low.

Bears cant get a better start than this. Indian markets are likely to
witness
hammering in the initial trades. Though the impact of Bear Stearns
cannot be
seen directly on the Indian Banking community, they might go down in
sympathy. RBI is the only saviour to the markets in the next fortnight
with a
cut in interest rates. Markets likely to go down tamely by another
500-600
points. The Fed meeting on Tuesday (March 18) will decide the course
of
global markets. Watch out for stunning happenings across the globe.
Let the
pain get out before any gain.

Market Close Box
BSE Sensex 15760.52 403.17
NSE Nifty 4745.80 122.20
USD Rs.40.45
Oil Nymex $110.2

N.Sukumar
Research Analyst
www.kences1.blogspot.com