Weekly Newsletter - June 20 2008

Worries seem to get inflated with the latest inflation numbers skyrocketing beyond imagination. The market was more or less ready for a double digit inflation but the fact that it crossed 11% was indeed a negative surprise. Expectations now are on what the central bank would do. On the political front, there could be some drama but no dramatic end in sight.

The prime minister may threaten to resign over the nuclear issue but it may just remain a threat. While the government looks at buying time, investors can look at buying stocks for the medium to long term. And no harm in booking profits if you are making money in the short term. Pleasant surprises could occasionally come your way often in the form of better global cues. Large caps purchased around these levels sure hold much more promise. The coming week will also see the F&O expiry. To that extent some short covering will keep the bears on the defensive though it need not bring back the bulls on the offensive.