Weekly Newsletter - Sep 27 2008

At the time of writing this, world markets were still unsure whether the US government's US$700bn bailout plan will get cleared by the Congress. President Bush, however appeared confident of seeing the rescue plan through despite growing apprehensions, which sent global markets into a tizzy on Friday. The unease over Bush government's bailout package may vanish if the US Congress approves the plan to cleanse the American financial system. Monday's movement in the market will hinge a great deal on what transpires on Capitol Hill. If the deal is passed in some form or the other, global markets are sure to rally. On the flip side, any further delay will dent investors' confidence further, leading to more selling.

Market players will also keep an eye on what happens to the Indo-US nuclear deal. Any bad news on this front could add to the weak undertone. On the whole, the outcome of these two events will drive the market on Monday. From thereon, the trend would depend on fresh newsflow from the US as well as local markets. The forthcoming quarterly results will be another key development. SEBI's Board is to meet on Oct. 6 to take a comprehensive review of the investment regime for FIIs. This will also have a bearing on the market. Given the uncertain environment, one should remain on the sidelines and let the dust settle before taking any call on the market. Aggressive investments should be avoided, as the market is highly volatile.