India's economic and stock market news analysis

Last updated on Nov 25, 2008

Posted on Nov 25, 2008

Here is some stock and economic news analysis I received in mail today:

+ Indian Stock Market arena is flooded with self-certified analysts who
draw up conclusions faster than a news can break. The number of such
analysts has drastically reduced compared to Jan’08, thanks to the bear
hug, rather thanks to the bear honeymoon, but still there are quite a
many. As soon as the news of Govt. releasing 15000 Crs to banks came in
there were messages with buy calls as they expected the market to take
positive cues from the news. They basically failed to understand that
Govt. is giving banks their own money!

+ It is heartening to note that CITI has escaped dieing a dog’s death,
else the CITI would have not let any one sleep! The positive news of $310
Bn (approx) bail out package has moved the Dow above few resistances and
hope the move continues. Though the news is great it may bring in some bad
news for Indian employees as the company now would definitely lay off
employees and cut salaries as a rescue plan. The market has most probably
factored the probable events, but still panic reactions cannot be ruled
out. We need not worry if these events take place in slow and steady

+ The good news is petroleum minister has announced that the fuel prices
may be reduced after the assembly elections going on in the six states.
The estimated cut could be around Rs.5/- for petrol and this would bring
in great relief from the inflation. Once inflation comes down further, RBI
will have more room to cut rates. Hence when the cut in rates are
officially announced the market would have something to cheer about.

+ Look at the politics behind fuel prices. If you remember MFF, some days
ago (browse through the previous posts) had predicted that the Govt. would
announce the decision to benefit in the elections. Why this announcement
today? The Prime Minister had earlier announced that the prices would not
be cut until the oil companies come into profits. Have they come into
profit today?

+ The nearest resistance for Nifty come at 2840 and the nearest support at
2590. We should take cues from Dow today for tomorrow’s trade. As
mentioned in earlier posts we should trade between 8000 and 12000 till the
next central Govt. is formed. Paid members of Market Fast Food and
Investors Arcade went long in a stock today and also we shorted a stock to
make some quick bucks. MFF Free Members can slowly buy Axis Bank at cmp
376 to 370 keeping a SL of 344. If profit has to be booked in between the
message would be sent on sms group. If it breaks 344 we can see a further
cut of Rs.50 on it.

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