Weekly Newsletter - Dec 27 2008

The bulls were hoping to be on seventh heaven this week but ended up losing around 7% in the major indices. Market activity will be dull at the start of the week and could pick up towards the end as foreign funds get more active. The market behavior, like the seasons keep changing. January no longer is the month where funds will come in droves after a break. In fact, the hunt for cash and bailouts continue across sectors. Automakers will be in focus as they report monthly sales. One could also hear something on the new fiscal stimulus and/or rate cuts.

From India's point of view, geo-political tensions will have a major play. Fears (it will remain just fears) of a military conflict with Pakistan have been brewing ever since the Nov. 26 terrorist strikes in Mumbai. The Indian army, navy and air-force have been asked to gear up for any eventuality while Pakistan too has stepped up air surveillance and is reported to have increased troops on the Indian side of the border. A lot of war of words will take place and for lack of other reasons, market could dance to the rhetoric.