Morning Murmur - 4300 IS A ‘SPICY’ ‘IDEA’

Bulls are going to have bears for breakfast this morning as the markets are likely to open sharply higher, following some frantic short covering. The US markets, not only sidestepped the Shanghai weakness but went onto register a new high for the Dow and finally for the S&P, which over came a 7 year resistance. Helping the US markets climb the wall of worry was the release of Fed minutes of the May 9 meeting, which
the markets read as bullish. Our take is that those minutes were clearly bearish for the markets as the concern for inflation has been re-iterated where as the concern from the sub-prime mess to temper over all economic growth have reduced.

Markets driven by liquidity can afford to arrive at an illogical conclusion and get away with it. An upward push of 50 points in the Nifty is not ruled out and that is where I suppose the May derivatives could settle. The Telecom shares will buzz today, as conjectures of Idea wooing Spice Telecom are all over the place in print and electronic
media. Technology could moderate the heavy gains, which one would have expected today.