28-07-2008 Market Ahead:

Market Ahead:
Expect a mercurial week ahead of RBI meet and result from biggies:


RBI is likely to continue with its tight money policy for some time as various measures are already in place to curb the inflation rate. The week
on week inflation did cooled off from its highs off 11.91% to 11.89% (two ticks) but still it is way above the RBI's leeway of 5.5%.

By June, the street was expecting 50 basis points (bps) in Repo with a CRR hike as well. But in the last few weeks the sentiment in the markets
has changed and it is anticipating RBI to increase only Repo by 25 bps (which is already been discounted).
RBI keeping the rates steady would certainly induce positive sentiment in the market. On the other side, RBI hiking both the Repo and the
CRR can result into huge sell-off in the coming days.

F&O expiry and Q1 results:
High volatility is expected in the markets ahead of FnO expiry of the July, 08 series and results of some stock market biggies including many
companies from the Nifty and Sensex. Investors & traders will keep their finger crossed for some biggies in the intemperately beaten down
sectors like Banking and Capital goods.
Companies which would be watched carefully will be ICICI Bank, Reliance Infrastructure, ONGC, HDFC Bank, L&T, Cairn India, NTPC,
Mahindra & Mahindra and Tata Motors among others.

Oil can play a spoilsport:
Oil after topping out at $147.8 per barrel has calmed down for some time at $120 levels, falling over 17% during the last two week. This has
been backed by concerns of weakening demand in the largest economy in the world, increase in oil inventory and the greenback gaining against the Euro.
However a supply disruption by Dolly or a geopolitical tension between Israel and Iran can surge the price once again. Oil has a good back up at
$120, if it breaks that level it would further add to the upward movement in the markets.

Global Market:

Orders for U.S. durable goods unexpectedly rose in June, and sales of new homes were higher than forecast, easing concern that the economic
slowdown will worsen. A private report showed consumer sentiment rose from a 28-year low. Morgan Stanley economists have raised their
forecast for Q2 GDP growth to 2.4% from 2.2% after the durable-goods report.
The important data to watch in the US next week is July Dallas Fed manufacturing survey, June Chicago Fed Midwest manufacturing index, July
consumer confidence & advance Q2 growth estimate by the government on July 31.