15 NOV 2007

Profit booking may take centrestage after Wednesday (14 November 2007)’s
record breaking rally that was triggered by easing of worries about the US
credit crisis. The market has been volatile in recent sessions, caught between
jitters about the US housing problems and optimism about India’s economic
outlook.

Upside on the bourses may be capped due to slowdown in FII inflow this month.
As per provisional data, FIIs bought shares worth a net Rs 163 crore on
Wednesday, 14 November 2007, when Sensex had surged 893.58 points or 4.69% to
19,929.06, in its biggest absolute point gain a singe trading session. FIIs were
net sellers to the tune of Rs 1951.50 crore this month (till 13 November 2007).

Massive FII inflow had send the market surging in September 2007 and October
2007. FII inflow was a robust in those two months - at Rs 16132.60 crore in
September 2007 and Rs 20590.90 crore in October 2007. FII inflow had surged as
huge liquidity infused by a steep 50 basis points cut in Fed funds rates in
mid-September 2007 found its way into emerging markets.

Subdued trend in global equities may trigger profit taking on the domestic
bourses today. US stocks fell on Wednesday, 14 November 2007, amid concerns
about a wider fallout from the housing downturn and credit crunch. Dow Jones
Industrial Average lost 76.08 points or 0.57% to 13,231.01. The tech laden
Nasdaq Composite Index shed 29.33 points or 1.10% to 2,644.32

MSCI`s measure of Asia Pacific stocks excluding Japan edged down almost 0.5%
in early trade on Thursday, 15 November 2007, a day after it jumped 3.7%.

US retail sales rose a sluggish 0.2% in October 2007 and producer prices
edged up only slightly, according to data on Wednesday, 14 November 2007, that
may give the Federal Reserve more leeway to cut interest rates further to prop
up a slowing economy.

The Q2 September 2007 results of India Inc.were decent to strong which means
that strong fundamentals would support Indian equities at declines. At the macro
level, the India’s economy is expected to post decent to strong growth for a
long period of time, mainly due to favourable demographics