Pre Market Report : 10.06.2008

[K.Karthik Raja]

Bear Bear go away!,Is there some help on the way?

Investors are tightening their seat belts and getting ready for some
more pain as the sentiment in the street has deteriorated to an all
time low. The Sensex is near the key psychological benchmark of 15,000
and this level might be breached anytime soon.

Wall Street had a mixed day with the Down ending with gains and NASDAQ
heading the opposite way after the Friday's sell off. The Dow rose
70.51, or 0.58 percent, to 12,280.32 and the Nasdaq composite index
fell 15.10, or 0.61 percent, to 2,459.46. Crude prices dipped more
than $4 to settle at $134.35 a barrel on the New York Mercantile
Exchange today. The Asian markets are expected to show gains between
0.5 to 1 percent for the day because of relief from the fall in crude
prices.

We have few interesting things happening on the domestic front. The
Finance Minister P Chidambaram expressed confidence that the economy
would grow a robust 8.5 per cent in the current fiscal and the direct
tax collection target would be revised sharply upwards.The growth rate
looks possible to achieve, but we are not optimistic about the tax
collection target.
Technology stocks have some bad news. Nasscom, the software industry
representative body, confirmed on Monday that the US economic
instability will slow down the growth of the domestic IT-BPO sector by
3-4% in FY09.we believe that the slow down in growth will be easily
balanced by the increase in margins resulting from the depreciation in
rupee.

In a separate note investment CSFB made comments that "India's main
stock index may fall to a 10-month low of around 13,000 points by
end-2008, as the Reserve Bank of India may raise interest rates to
check inflation due to record oil prices". So we are looking at a 13.7
percent dip in the Sensex from the current level of 15,066. At the
current pace we might reach the target in couple of weeks.We feel that
valuations are getting better and it might not be a bad time to get
some capital in place for taking some stock in select
companies.Hopefully we will bulls will get some relief in
Tuesday's trade.

*USE EVERY RISE TO GET EXIT FOR SHORT TERM INVESTORS
*ALWAYS KEEP STRICT STOPLOSS TO AVOID HUGE LOSS

Previous Close Box :

BSE Sensex 15066.10 -506.08
NSE Nifty 4500.95 -126.85
USD Rs.42.89
Oil Nymex $134.3

K.Karthik Raja