Pre-Market report on 03.04.2008

[naresh0...@yahoo.co.in]

Beaten midcaps in favour
===================================================
Wall Street turned deaf to Mr.Bernake's comments that US might slow
into a
recession due to downward spiral in homebuilding, employment and
consumer
spending . Dow Jones lost 48 points to close at 12,605.83 while Nasdaq
closed
at 2,361.40, down 1.35 points. A contrarian view suggests that US
Markets
already discounted the recession and the stocks tend to pull back 10
months
before the actual recession ends. Though there are numerous views
about
the "Recession" we have no official confirmation till date from the
concerned
organization as the definition of Recession is not met till date.
Later part
of April might see the announcement once US GDP numbers for the Q1
2008 are
out. After house BlackBerry maker Research in Motion declared
outstanding
results. This should set the tone for tech stocks tomorrow on Nasdaq.

Japanese market had a ball yesterday with a huge gain on Nikkei, which
closed
at 13,189 up 532 points. US Dollar gained against Yen and is
currently
trading at 102.3.

It is definitely pathetic to see the home markets in deep distress
when
global markets are shining. The current situation is indeed the
blessing of
the US markets which ignited the bearish views across the emerging
markets.
Now domestic issues are taking toll on the markets and we believe it
is only
a matter of time we race ahead along with the global markets. Finance
Ministry is on its toes to contain inflation while regulatory
authorities
want all the corporates to keep their books clean. RBI is expected to
raise
interest rates to contain inflation. Markets are slowly discounting
the
same. We expect all the negatives to be sidelined soon and Infosys
result
would be an ideal event for the rally to take off. We do not expect
any
warnings from Infosys though the company might not be in a position
to
maintain the growth trajectory, already factored by the markets.

As expected select midcaps are moving and the up moves are random and
not
driven by any sectors. Many stocks have lost some where between 30-70
percent
from their January highs. We expect the non-index stocks to continue
performing while Index stock movements are completely dependant on
domestic
factors and local funds. There is no reason to say shorts are
dictating terms
as Nifty has not seen any major build up on either front. Indian
Markets
require liquidity flow which major FII's along with couple of domestic
funds
can supply as majority of retail investors are absconding from the
market.

Market Close Box
BSE Sensex 15750.40 123.78
NSE Nifty 4754.20 14.65
USD Rs.39.98
Oil Nymex $104.8

D.Naresh Kumar