Weekly Newsletter - Nov 22 2008

As if the wild swings are not enough we have an F&O expiry week to contend with. Inflation may flatten and so could indices, unless US markets stage a strong comeback on Friday. The second-quarter GDP numbers will be announced on Nov. 28. The data will be followed keenly to ascertain the impact of the financial turmoil and global economic slowdown on India. The Finance Minister will address the media and the second phase of J&K assembly polls will take place next week.

Over the weekend new developments could take place. Citi never sleeps and now people are losing sleep as the stock has shed over a quarter of its value in the last couple of days. Citi's board is scheduled to consider proposal for sale of part or whole of it amid increasing concerns over the New York bank's future prospects. As we write US stocks are up smartly while European shares have slipped into the red zone after rising earlier.

Goldman Sachs has increased its recession estimates for the US economy, saying GDP is declining at a 5% annual rate in the current quarter and will drop 3% and 1% in the next two quarters. Europe's manufacturing and service industries contracted in November at the fastest pace in at least a decade. Oil rose for the first time in six days. Crude oil for January delivery rose as much as US$1.23, or 2.5%, to US$50.65 a barrel on the New York Mercantile Exchange.

Any rise will remain a short term spectacle for now. The bad news continues to flow while any good news on liquidity and foreign fund inflows are conspicuous by their absence. Use the gains to lessen your pains. Avoid any aggressive buying as we still sees the October lows being tested in the weeks to come. Any bad news on Citi could dampen sentiment across the globe. On the flip side, lack of bad news might see stocks gaining slightly.