Pre Market Report : 11.06.2008

[K.Karthik Raja]

Some relief on the way?
Jun 11, 2008

Markets are desperately in need of a relief rally as the benchmarks
fell to
their lowest level in 2008. Wednesday might pan out to be a better day
when
compared to the rest of the week so far.

The cues from the global indices are neutral as stocks ended flat in
Wall
Street. Tech stocks underperformed and pulled down NASDAQ by nearly
0.5percent.Crude oil's retreat below $132 a barrel did encourage some
investors to search for bargains in stocks created by recent plunges.
The
financial sector, for one, saw strong demand after taking a beating
Monday.
Asian indices are mixed as Nikkei is trying to float in positive
territory,
where as stocks in Hang Seng (Hong Kong) dipped by more that 0.4
percent in
early morning trade.

The fall in the major stocks like Reliance, ICICI Bank and HDFC
suggest some
strong fund selling in the past few weeks. With rise in inflation and
looming possibility of rise in interest rates the chances of a rally
or a
huge pull back seems far away in the short term. There are no known
positive
triggers as such which might attract huge buying. From here we do not
see a
steep fall in the indices as there is nothing much to loose from here.
We
expect some positive sector specific policy announcements by the
government
in the 3rd week of the month to attract more foreign investment.

Pharma sector has been the darling of the market this week led by
Ranbaxy
adn Piramal life. Ranbaxy was trading at its lows when the indices
were at
life time highs. Now its the pharma big boy's turn to make an upmove.
Some
private banks like Yes Bank, Dena Bank and DCB look oversold and might
be
accumulated. We see a decent recovery in the indices although not a
huge one.

Market Close Box:

BSE Sensex 14889.25 0.00
NSE Nifty 4449.80 -51.15
USD Rs.42.89
Oil Nymex $131.3

B.Karthick,
Research Analyst.