Epaper
Its 400’s time again for Dow Jones. This is the second time in 10 days for Dow Jones to gain more than 400 points. Lehman Brothers and Goldman Sachs shattered the bears hopes of another winning session and then Bernake’s 75 basis point rate cut, though on expected lines ignited the rally further. The rally once again proves that things are not as bad as expected.
Japanese markets were trading in green after quite some time boosted by Fed decision and overnight US rally. US Dollar pulled back strongly against Japanese Yen and currently trading at 99.64.
Bear Stearns shuns Indian Markets
Bear Stearns rocked the Indian Markets for the last sessions especially midcaps which are already battered in the last 2 months. Absolutely no support from any corner sent these stocks dwindling. Retail Investors are mostly invested in the markets have no choice except to hold and pray for good times. Investors who are sitting in cash are waiting for sub 12,000 levels as per rumours. Now lets see whether markets prove their might again or investors win in this waiting game. Extremely high short positions favour the bulls but rock solid bear coterie will try to disturb the gains.
News about SEBI enquiry on Reliance Petro on allegations of Insider trading is unlikely to impact the markets. We expect a 600 – 800 point gain on the Sensex today. Any thing less than that should be considered abnormal given the heavy hit the markets have taken in the past couple of months. This is the second time the US markets are providing the domestic markets an opputunity to pull back. Last time IIP data was cited as the reason for wasting the oppurtunity.
Banking and Brokerage stocks are set to recover after severely hit in the past fortnight. There might another final bout of selling from Bear Stearns but we expect the selling to fade in the rally today. Orchid Chemicals saga shows how tables can be turned in couple of months. The promoter bought shares of the company under margin account and pressure from the lenders resulted in a big blow to their stock coupled with Bear Stearns selling.
Newly listed stocks like GSS America, V-Guard, IRB Infra and On Mobile have showed great resilience in the past couple of months when markets are beaten black and blue.