MFF-FE – 081105


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– It’s coming! The rate cuts are looking more a reality now. FM has finally pressurised Banking sector to reduce both lending and deposit rates which would directly benefit markets in the long run. The immediate bump up what we saw today was frenzy buying on release of the news.

– The rate cut is not what MFF is rejoicing about its the confirmation that rates have peaked which should make us happy. A 0.5% rate cut is not going to line up credit takers tomorrow at bank doorsteps, we require a minimum 2% rate cut at this point to prop up sentiment. This targets would be achieved slowly over next few months.

– The US elections are in final stages hence it can safely be presumed that markets in US would not make any major move. The world would be in wait and watch mode at least those countries which largely depend on US. Delhi elections have been announced and hence expect lot of drama this month and next. MFF strongly feels parliament elections may come around in February before budget as the Govt. would escape explaining the fiscal deficit to the nation!

– As already mentioned the above circumstances would not let our markets make any major move until a new Govt. is installed at the centre. Resistance on MFF Free SMS Group was mentioned at 3100 – 3140 on Nifty and today the close has happened at 3142.10 which is just marginally above our levels. The move has to continue tomorrow, banking may still find some buying. Be hooked on to MFF.


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