The Future ?????????

In an anticipated move, the Reserve Bank of India, or RBI, has cut the cash
reserve ratio, or CRR, by 150 basis points to 7.5% with effect from 11th Oct 2008 
in a bid to infuse liquidity into the markets.The announcement came close on the
heels of a sharp fall of over 1,000 points on the Sensex on Friday morning amid
cues from falling global markets. Soon after the announcement, the Sensex recovered
a bit, before falling again later.

What Next

The positive factors are

CRR cut 7.5% from 9% earlier
Below than expected levels of Inflation at 11.8%
and Falling crude oil at around $80(Nymex)

But, then why the market goes down

There is a tight liquidity between Indian Banks and liquidity crunch between
US and European Banks are more cause of worry. Investor in overseas feels there
may be more fall outs in the coming days. US's Fed Reserve, UK's BOE and EU's ECB
have started infusing liquidity into the banking system. This may bring some relief.
According to some of the media reports the foreign banks are not ready to lend each
other. All the banking regulators are trying to bring normalcy in the money market.
This may take some time to calm the investors, at the same time they feel that the
current situation has proved the confidence is shakened. Very much uncertainty prevails.
There is no clue about when this US recession will end.

Back home, the Indian Markets shows some support around 10500 for SENSEX.
The next very immediate support comes @ 9830 as pet the line charts for the last 3 years.

Hope that may not broken. But the Long Term investors may start picking front line
shares in a staggered manner. As the valuation looks realistic levels one can start buying.

Please visit us on Monday Morning for market report.