Higher level may attract profit taking

Political concerns may trigger profit taking on the bourses after a solid surge witnessed over the past few days. Political concerns have resurfaced with CPI (M) veteran Jyoti Basu on Saturday, 29 September 2007, ruling out the possibility of any compromise on the issue of Left’s opposition to the Indo-US nuclear deal. While the operationalisation of the deal has been put on hold by the government pending the findings of a committee, it cannot be stalled forever.

The Communists want the government to defer the Indo-US nuclear accord by six months and have warned of a political crisis if it is implemented. The committee set up of the government to look into Left Front’s concerns over the deal is scheduled to hold its next meeting on 5 October 2007.

On the flip side, political turmoil arising from nuke deal will not impact India’s basic economic fundamentals though some infrastructure projects may get delayed. India’s economy is expected to post strong growth for a long period of time mainly due to favourable demographics.

Q2 September 2007 results is the next major trigger for the market. Figures of advance tax suggest that earnings will be decent to strong. Stock specific activity may take place in the near term on the bourses ahead of the earnings-reporting season, based on result expectations. IT bellwether Infosys Technologies kickstarts reporting season on 11 October 2007.

The market has been a roll with the Sensex hitting record high in each of the past eight trading sessions from 19 September 2007 to 28 September 2007. Heavy FII buying and hopes of a further cut interest rates by the US Federal Reserve at its next policy meeting on 30 October 2007-31 October 2007 has boosted bourses. Sensex rose 140.54 points 0.82% at record closing high of 17,291.10 on Friday, 28 September 2007.

From a low of 13,989.11 on 21 August 2007, Sensex galloped a whopping 3,301.99 points or 23.6% to 17,291.10 on Friday, 28 September 2007

As per provisional data, FIIs were net buyers of shares worth a net Rs 2275.71 crore on Friday, 28 September 2007. Domestic institutions were sold shares worth a net Rs 100 crore on that day. FIIs inflow in the month of September 2007 totaled Rs 16132.60 crore.

The stock market remains closed tomorrow, 2 October 2007, on account of Gandhi Jayanti.

Asian markets extended their recent rally on Monday, 1 October 2007. Key benchmark indices in Japan, South Korea, Singapore and Taiwan were up by between 0.39% to 1.6%.

US stocks and bonds slipped as the dollar fell to a record low on Friday, 28 September 2007, amid concerns that US economic growth would continue to slow. The Dow Jones industrial average lost 17.31 points, or 0.12%, at 13,895.63. The Standard & Poor's 500 Index fell 4.63 points, or 0.30%, at 1,526.75. The Nasdaq Composite Index fell 8.09 points, or 0.3%, to 2,701.50.

US crude for November 2007 delivery lost $1.23 to settled at $81.65 a barrel on Friday, 28 September 2007, below its all-time high of $83.90.