TRends

In fact this is  psychologically bad news and virtually having no immediate harming impact. 3 following historical examples will clear the impact of this news also;-

1- US Fed hiked Discount rate by 25 bps on 18-02-2010 after closing of their markets and next day in reaction Asian markets were more than 2% down and Dow's futures also traded more than 90 points down but no adverse impact was seen and US markets closed in Green on 19-02-2010.

2- SGX Nifty was more than 200 points up on 19-05-2009 but Nifty opened flat and closed in Red same day(It was next day after post-election results double upper-freeze session).

3- Markets moves on technicals and not much effected by news. All trends were up before the begining of Kargil war on 08-05-1999(Sensex @3707) and during war short and intermediate term trend trends turned down but long term trend always remained up. on July 4 when Pakistan P.M.Sharif agreed to withdraw Pakistani forces Sensex was at 4194. Sensex gained 487 points during that war when Nuclear war fear was in every one mind.

As per my view this news is positive and being taken negative due to psychological reasons and without understanding its implications. WOrst situation will be weak opening and that will provide buying opportunity immediately after first sign of consolidations. Sharp rally expected in Real Estate,Auto,Banking interest sensetive sectors as well as in Indian markets next Monday.