MarketS DailY - Dec 17

US Markets

Dow 8924		+359.61	(+4.20%)
Nasdaq 1590		+81.55	(+5.41%)
S&P 913		+44.61	(+5.14%)

Europe

FTSE 100 4309		+31.52	(+0.74%)
CAC 40 3252		+66.00	(+2.07%)
DAX 30 4730		+74.87	(+1.61%)

Asia at 9 30 AM

Nikkei 225 8661		+92.88	(+1.08%)
Hang Seng 15428		+298.16	(+1.98%)

SGXNifty 3119 +54 pts

Commodities

Light Crude (NYM)

43.60

(-0.91)

Gold (CMX)

842.70

(+6.20)

Market Outlook:

US Markets rallied hard after FED's move to bring down interest rates to near zero. All world markets are staging a big bear market rally most markets are up 15-20% from the lows. Nifty might continue its rally till 3150-3200 levels. Above that 3450 seems a possibility.


News Today

* The U.S. Federal Reserve cut a key rate Tuesday to a range of between zero and 0.25 percent, moving away from its tradition of naming a target rate.


* OPEC meets todays to announce production cuts. Non OPEC oil producer Russia is also expected to cut production.

* Goldman Sachs the lone standing profitable Investment Bank Posts $2.1 Billion Loss.

* Satyam made a shocker of a move by announcing a buy out of Maytas infra & properties for an estimated $1.6 billion. Investors lashed out against the deal and ADR fell 55% in Nasdaq. Finally the deal was called off after 12 hrs. This issue raises serious concerns on Corporate Governance.

* Dollar tumbles to 13 year low after the FED rate cut. Dollar will be under huge pressure in zero percent interest rate scenario. 30-Year bond Yields Hits New 50-Year Low on Fed Move.

* US CPI falls 1.7% in NOV , biggest fall since 1932 depression. Raises fears of a deflation scenario.


FED's Press Release:

The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.

Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.

Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.

The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.

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