After all we all are mindless, irrational, easily manipulated scholars:-)

HBJ Capital Report.... (Update for Sept 4th)
[Publisher of "10in3" (Small Cap with 10 times in 3 years potential) Equity Research Report & "Street Smart" (Lots of Investment Ideas) Newsletter]



Everything in this world is relative; the way we react to any situation depends on our state of mind in the recent past. Just like a severe depression or strong pessimism gives rise to lot more happiness even if the reason for happiness is small.

Exactly same thing happened in Indian stock market today. Was there any reason strong enough for Indian stock market to move up 3.5%? Crude has come down and it is a good news for whole world not only for India. With same news Indian stock market moved up 3.5% compare to Europe or US which were either down or up hardly 0.5%. What will be the reason for such a diversified approach by two different set of traders one in India and other in US/UK?

------------------------------------------------------

Market Wrap-Up:-

• A strong rally in the equity markets pushed up the key indices in pre-close trading today, lifting the BSE Sensex over 15,000 points level and the NSE index Nifty over 4,500 points after crude fell below 106 dollar a barrel in global markets.
• While the Bombay Stock Exchange benchmark Sensex spurted by 574.17 points, or 3.96 per cent, to 15,072.68 at 1400 hrs, the second wide-based National Stock Exchange index Nifty went up by 173.75 points to 4,522.40.
• Indian shares rallied Tuesday as steep fall in crude oil prices eased concerns of high inflation and on expectations of moderation in interest rates. Rate sensitive sectors like realty and banking were the most sought after.
• Banking stocks rose in anticipation of steady lending rates after a fall in fuel prices. A change of guard at helm of the central bank also boosted the trading sentiment. Buying activity gathered momentum as speculators indulged in covering their short pending positions in view of sea-change in the market scenario.

------------------------------------------------------

HBJ Capital Views for Thursday.
>>>>Today’s movement in Nifty for 150 points were called as irrational exuberance and too much, too early; so it is simple that on Thursday Indian Market will show sign of profit booking.
1st - because of not so good global clue, 2nd - because of crude which might see some upside or consolidation, 3rd - due to low probability of Nuke deal pass thru during NSG meet on Sept 4th/5th.


>>>>In fact, falling crude oil lifted the investor sentiments. If crude corrects to $100 or $98 a barrel we might see Nifty to touch 4800 levels. However, if oil rebounds from this level to $114-115 a barrel then Nifty might get stuck in 4300-4500 range. So, "Jo kareka crude karega" (All depends on movement in crude prices now).

>>>>It’s better to book profits at this point of time and stay lighten till we get the further direction. We are expecting India Stock Market to fall due to profit booking on Thursday. Though the fall will not be severe, one can see 1-1.5% fall with lots of buying interest in between by those who missed this rally.

• Ahead of the Nuclear Suppliers Group meeting later this week, an air of uncertainty prevailed today over whether the 45-nation club will approve the Indo-US nuclear deal with some countries still dissatisfied with the revised draft.
• China, which has so far remained ambiguous with regard to its position at the NSG meeting, also came out openly against the Indo-US nuclear deal, with the Communist Party's mouthpiece 'People's Daily' saying it was a 'major blow' to non-proliferation.
• We don’t think too many people would have seen crude collapsing to USD 105-106/bbl because a lot of people were talking about that USD 108/bbl mark as a big support, which should not break quite so easily but the effortless ease with, which it has broken down might have taken a few people by surprise. And which is why the moment crude broke through that USD 108/bbl levels you saw a couple of 100-points rally on the index and straight away on the Sensex, so it has been absolutely stunning.

------------------------------------------------------

Global Market Update..

• Stocks surge as oil prices tumble; worries over Gulf Coast damage from Gustav ease. Stocks soared early Tuesday as oil prices fell sharply on reports that the Gulf Coast and its oil facilities have been spared heavy damage from Hurricane Gustav. But finally due to ailing financial companies; US stocks lost all the gains and were around 60 points down DOW by the time of writing.
• Light, sweet crude fell $6.69 to $108.77 a barrel on the New York Mercantile Exchange, easing Wall Street's concerns not only about Gustav, but also about inflation's impact on the broader economy.
• The market's optimism was also boosted by news that Korea Development Bank is in talks about taking part in a possible acquisition of Lehman Brothers Holdings Inc. Such a move could allay some of Wall Street's worries about the troubled financial sector.

- HBJ Capital Team.