Weekly Newsletter - Oct 4 2008

Even as the Bush government is banking on the Congress to bail itself out, the market here will turn its focus on quarterly results. Most players will be closely analysing India Inc's report card to gauge the impact from the worsening macro factors, besides the global financial crisis. At the same time though, they will keep one eye on the happenings in the global markets given the enormity of the financial mess. One factor could swing the pendulum in favour of the bulls is the dip in inflation, which has fallen below 12% after a long time. Whether the same prompts the RBI to ease the monetary policy remains to be seen. Meanwhile, the rupee continues to be under pressure, which is adding to the worries for the FIIs. Also, a weak currency makes imports costlier, resulting in a higher trade gap and thus affecting the overall Balance of Payment situation. So, the movements in currency and commodity markets will also have a bearing on the market sentiment.






Among the stocks Tata Motors would be in focus as the company has formally withdrawn from Singur. Next week will also be a truncated one as Thursday will be a holiday on account of Dasera. Infosys will come out with its earnings on Friday. At the time of writing this, markets in the US and Europe were quite buoyant ahead of the much-awaited House vote. Last time around, the House sprang a surprise by rejecting the measure. This time though, the bill has been modified and a few provisions have been included in it to quell some of the opposition to the bill. It remains to be seen, however, if the bill gets cleared or not. And, even if it does, there are concerns about how effective it will be in reducing the pain in the financial system. Any favourable news on this front will have only a temporary impact on the market. Given that there are hardly any positives to drive the indices higher, we expect the market to remain sideways with a negative bias.