Pre-Market report on 29.04.2008

[K.Karthik Raja]

RBI policy meet, market to feel the heat

USMARKET :

US Market see sawed on Monday only to close marginally lower. Dow
Jones ended
the day down 20 points at 12,871 while Nasdaq moved up 1.5 points to
close at
2,424.40. Bush administration rushed the stimilus packages offered to
the tax
payers, well ahead of schedule, in a bid to save the falling economy.
This
would enhance the consumer spending resulting in better growth numbers
in the
next one month to 45 days. These can be termed as temporary measures
only and
the govt is hoping to get back the economy on track before the
upcoming
elections.Fed meet on wednesday appears to be a hangover for the
markets but
we are in a comfortable zone technically and expect a rally in the US
markets
from these levels.

INDIAN MARKET :
Indian stocks were mixed on Monday with large caps taking the wrong
route
while the midcaps and small caps continued to march ahead. Forex
derivative
losses have seen the light of the day with Wockhardt, KPIT Cummins,
Hexaware
& SRF among the first few companies that declared M-to-M losses. We
expect
few more to join the bandwagon.

Mindtree and Satyam are likely to reap rich rewards on the deal
announced
with ArcelorMittal on Monday. Both the companies will be vying for
projects
from the global steel major with an annual turnover of nearly USD
105.2
billion. Meanwhile TCS signed up a USD 120 million contract from
British
utility Scottish Water. Few midcap IT stocks came out with decent
performance
while many missed the revenue targets. Only few stocks in the sector
will
outperform the market.

Mr.Reddy will come up with the rate decision today and is most likely
to make
the market dance to his tunes. Mr.YV Reddy recently expressed his
concern on
the ‘unacceptably high’ liquidity. Thus, the central bank raised the
cash
reserve requirements (CRR) for banks by 50 basis points. Many
analysts
beleive that markets will correct in a big citing this as a major
event. We
debate with the same, though inflation looks like a trouble we
beleive
markets will factor in all the negatives in style. We do not see a
reason for
big upmove in the extreme short term too.

Consolidation is the mantra and it will take its own time for a break
out.
Till then traders can have a good time playing with the technical
levels on
both sides.

Market Close Box :

BSE Sensex 17015.96 -110.02
NSE Nifty 5089.65 -22.05
USD Rs.40.14
Oil Nymex $118.7