Pre-Market report on 12.03.2008

[B. KARTHICK]

Bears thrashed all over 'Wall' Street ; Mumbai Bulls to repeat the
feat

Its Tuesday morning and bears are expecting another day at work in
the US Markets. Mr.Bernake,the bulls saviour suddenly fired a missile
pre-market that sent shivers across the spines of the bears on the
wall street. Fed announced injection of $200 billion into the banking
system on Tuesday. Mortgage stocks, financial stocks and banking
stocks along with their tech counterparts reacted sharply resulting in
a record breaking performance in the US Markets. S&P 500 and Nasdaq
jumped the most in more than five years, and the Dow recorded its
fourth-biggest point jump ever. Dow Jones ended the day at 12,156.81
(up 416.6 points) and Nasdaq at 2,255.78 (up 86.42 points). We believe
Fed acted in a smart way instead of going for a upfront rate cut,
which will improve the liquidity in the system. We expected a Fed move
yesterday but in the form of interest rate cut before the meeting.

Are the shorts stuck? Best of luck

There is a huge short interest build up across the global markets on
the
expectations of US Recession and slow down in the global economic
growth. Nasdaq announced short interest at 9.25 bln shares at the end
of Feb 29. Indian markets are no less with rumours of 12,000 and
10,000 for Sensex and guaranteed Recession talks propelled many retail
investors to take huge short positions in the markets. Thanks to
Indian media supported the cause injecting confused thoughts in the
investor minds. Though it is too early to celebrate, we believe in the
modern day economy things cannot go bad instantly. There are Central
Banks, which will try to diffuse the situation to the max extent
possible. For Ex: US Fed bank is acting in agreement with European
Central Bank through its currency swap program.

Boom !! There goes the great Indian Bull

Gap up open. Perfect setting for short traders. Though bears will try
to
fight back the huge global response on the Fed's action will push
Indian retail investor a thought or two to get into the market. BSE
Sensex is likely to gain no less than 500 points today and a broad
based rally is in the offing. Majority of the beaten down stocks are
likely to see action and as said the two close above the technical
level 15,880 for Sensex proved to be damn strong. Now the 75 basis
point cut by Fed on March 18th is another trigger though the market is
discounting the same. Markets continue to be volatile till a clear
picture arrives. We say for the time being don't be dull and friend
with the bull.

Market Close Box:
==================

BSE Sensex 16123.15 199.43
NSE Nifty 4865.90 65.50
USD Rs.40.67
Oil Nymex $107.9

B.Karthick