Market outlook for week starting 10th Nov 2008

 BSE Sensex Chart(Live from BSE India)

"The global financial turmoil has had knock-on effects on our financial markets; this has reinforced the importance of focusing on preserving financial stability"

- Reserve Bank Of India  

The Reserve Bank of India (RBI) India on Saturday unexpectedly cut its main short-term lending rate for the second time in as many weeks to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the global financial crisis.

Policymakers around the world also have slashed interest rates in recent weeks and injected huge amounts into their banking systems to try to combat the spillover effects of the global financial crisis, which is causing credit markets to freeze up and threatens to plunge the world economy into recession.

The central bank cut the repo rate or its main short-term lending rate by 50 basis points to 7.5 percent and banks' cash reserve requirements by 100 basis points to 5.5 percent.The cut in banks' cash reserve requirements will take effect in two steps -- one from the fortnight beginning Oct 25 and the second from Nov 8 and will release 400 billion rupees ($8.1 billion) into the banking system. This liquidity in the banking system is expected to drive the market in upward direction in near future. 

while recommending, we have selected the scrips with utmost vigilance and scrutiny. But one should remember that gone are the days when one used to get multiple returns within a span of few days or months. Currently, we are facing a ‘once-in-a-century’ kind of situation where even the giants have collapsed and filed for bankruptcy. Not just individual companies, even countries are facing the fearful prospect of bankruptcy.One should consider himself lucky if he gets an appreciation of 25-30 per cent in a year.

At current prices we recommend our viewers to stay calm and stay invested (if you have invested earlier), Major stocks like Reliance Industries, ICICI Bank, Infy, TCS saw their valuation decreasing by 30-40% in the past one month. If you are a new investor, We recommand you to start investing slowely and accumulate the major stocks. Also We advise our viewers to keep away from penny stocks and Hot Tips. 

Our Recommendation for this week are,  

Buy Yes Bank @68 Short Term Target Rs.80-90

Buy Reliance Infra @ 456 Short Term Target Rs.600

Both the stocks have fallen by more then 40% in the last month. But at the same time Yes bank has posted a net profit of Rs 636.20 million for the quarter ended September 30, 2008 as compared to Rs 452.80 million for the quarter ended September 30, 2007. Total Income has increased from Rs 3793.80 million for the quarter ended September 30, 2007 to Rs 5699.30 million for the quarter ended September 30, 2008.

Reliance Infra despite the slowdown in real estate sector has posted a net profit of Rs 2889.70 million for the quarter ended September 30, 2008 as compared to Rs 2500.80 million for the quarter ended September 30, 2007. Total Income has increased from Rs 17700.70 million for the quarter ended September 30, 2007 to Rs 26748.60 million for the quarter ended September 30, 2008. Last week the stock was up by 75% And after announcement of the Rate cut by RBI it is expected to perform better. 

 Please maintain a cautious approach and invest only in fundamentally sound companies.