Indian Markets Next week July 28th 2008

As expected the United Progressive Alliance got through the vote of confidence in the parliament. This news along with some support of global factors boosted the markets to a recent high of around 15,000. But it could not maintain the winning streak on last couple of days of the week on the expectations of further bank write downs in U.S. and profit booking at higher levels.

Inflation for the first time since May eased marginally. The inflation figure for the week ended July 12^th recorded at 11.89 per cent. This slight decrease in inflation came from moderation of some food items like sea fish, imported edible oils and tea.

On Friday July25th oil prices fell sharply dropping at times below $123 for the first time in weeks.

The crude for September delivery fell $2.33 to $123.16 a barrel in on the New York Mercantile Exchange. Earlier the contract dropped as far as $122.50, its lowest point since June 5.

It’s a testing time for investors. If the major banks like Citi Group and Merrill Lynch write down it will impact the markets adversely. Investors are advised to stick to the A Group companies with good profit earning history. Playing with momentum stocks could prove costly.