>Trade Winds (KARVY)

06 April 2009 to 12 April 2009

Spectacular equity MARCH…
Global stock markets witnessed a spectacular rally last week and also the whole of March.
The rally was due to broad-based buying across the globe after investors were of the view
that the pace of the global slowdown might be receding. The economic data released in
various parts of the globe also indicated that stimulus packages announced by governments
were working towards providing a soft landing for the global economy. Indicators like
pending home sales and consumer confi dence levels in the US, home prices in the UK,
and manufacturing data in China boosted sentiments in global equity markets. Moreover,
equities turned attractive after a steep fall which pushed them into the oversold zone.

The G-20 summit agreed to spend US$ 1.1 trillion to revive the world economy. The G-20 also recognized fi ghting protectionism and tightening banking and fi nancial services regulations as the other top priorities to get the world economy back on track. However, fears of rising unemployment in major economies, concerns over the deteriorating European economy, and excessive regulation on the fi nancial services sector are likely to be the hurdles of the rally in equity markets.

Indian stock markets rallied sharply during the week due to heavy buying interest across the
board. The Nifty closed the week above the 3200 levels. Select auto, BFSI, construction,
metals, energy and telecom stocks recorded signifi cant gains last week. However, the
domestic stock markets are likely to be infl uenced by global markets during this week due
to lack of major triggers, given that India is going to the polls. However, the possibility
of further rate cuts cannot be ruled out as the near-zero infl ation provides greater leeway
for doing so.

Overall, the Nifty is likely to trade in a range of 3000-3400 over the week with intermediate
resistance placed at 3250 levels. Energy, metals and technology stocks can be considered for
assuming long positions whereas FMCG, banking and construction stocks can be shorted
from higher levels.

To see full report: TRADE WINDS