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Market Forecast

Equities likely to remain volatile on Fed cut (The Economic Times 31th Jan 2008)The mood in the Indian stock market is likely to be volatile following a 50 bps cut in the interest rate by the US Federal Reserve and expiry of January futures. The US Federal Reserve has cut rates to 3 per cent and also hinted that rate cuts were possible in the near future. Dow Jones Industrial Average, which moved up over 100 points after the announcement, settled 37.47 points or 0.30 per cent lower at 12,442.83 and Nasdaq Composite closed 0.38 per cent or 9.06 points down to 2,349.00. Equities will also be taking cues from subdued Asian markets which remained mixed after Federal Reserve’s announcement couldn’t lift bearish sentiments. Japan’s Nikkei Average was 0.55 per cent higher at 13,417.98, China’s Shanghai Composite was 0.34 per cent up at 4,432.932 and South Korea’s KOSPI was up 0.58 per cent at 1598.35. More

Crystal Grazing

2008: equity markets will have to battle several headwinds (Live mint.com 1st Jan 2008)Will equities do as well in 2008 as they did in 2007? Will we see a continuation of the main trends of 2007? Or will the credit crisis in the West derail the bull market? It’s that time of the year when we all make predictions, never mind that nobody saw the subprime crisis coming last year. Two markets of 2007 In fact, 2007 can be neatly divided into pre- and post-subprime. Between 1 January and 24 July 2007, the MSCI World Index rose by 9.4%. Between 24 July and 28 December, it fell by 1.7%. Emerging markets too saw a slowdown in returns post-subprime, but things were not as bad as in the developed world. The MSCI Emerging Market index was up 26.7% between 29 December 2006 and 24 July, but rose a comparatively tepid 7.8% between 24 July and 28 December. The Sensex , however, broke loose from global trends and blazed a path all its own. Indian stocks zoomed after the subprime crisis hit the West. ...