Market Outlook 13/10/08

Market may just start showing relief rally now

It was a scary fall in indian market last week and the begining of this week may show some relief rally though global cues are still negative.The Dow lost 128 points, giving the blue chips an eight-day loss of just under 2,400, or 22.1 percent. On Friday, the Dow was down 468 points at 3 but rocketed 790 points and was up 322 points just after 3:30. It then sold off but closed down only 128.The Dow Jones industrial closed at 8,451.49-128 points down from the previous close.Most major central banks around the world slashed interest rates this week after continuing problems in the credit market triggered concerns that banks will run out of money.Meanwhile the US government has decided to buy stake in banks, first time since Depression.The purchase of stakes in companies would be in addition to the main thrust of the $700 billion rescue effort, which is to buy bad mortgages and other distressed assets from financial institutions.Moreover the Finance officials from the world's top economic powers endorsed a plan Friday to stem the worst financial crisis in more than a half-century.On Friday, the Reserve Bank of India (RBI) said it would make a deeper-than-expected 150 basis point cut in cash reserve requirements on Saturday, to release 600 billion rupees ($12.4 billion) into the system.The stock market may take some positives on these news now.For today, even if there is gap down opening buying wil come from lower levels and nifty above 3340 will face resistance at 3400 and on downside below 3250 might go till 3220-3200.Watch out for volatile day of trading again.

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