Inflation at 44-month high of 7.83%

Inflation hit a 44-month high of 7.83% for the week ended May 3. The last time inflation hit such a high was in September 2004, when it touched 7.86%. Despite a high base effect and slew of fiscal and monetary measures initiated recently, inflation accelerated from 7.61% for the week ended April 26. In just two months, the inflation rate rose two percentage points from 5.66% for the week ended February 16 to an uncomfortably high level of 7.83% for the week ended May 3.
The worrying factor this time is the rise in price indices across all categories, including primary articles, manufacturing, and fuel and lubricant, in both year-on-year and week-on-week terms. Moreover, the revised figures for WPI for the week ended March 8, which has been revised to 7.78% from the provisional estimate of 5.92%, the actual inflation for the week ended May 3 may be over 8%. Provisional WPI estimates are revised after two weeks and final figures come after eight weeks.

Unless global crude oil prices decline, India would continue to witness "pretty high inflation" in the fuel group. In the coming days, the possibility of 8% inflation cannot be ruled out if the prices in global market continue to surge. The basket of crude oil that Indian refineries buy rose from $89 per barrel in January 2008 to $120 per barrel as on May 15, 2008. While crude has been hovering above the $120 per barrel mark, the rupee too has declined 6% since April 15, making imports expensive.

A sharp rise in oil prices and the depreciation of the rupee have partly negated government's efforts to control inflation. The limitation of administrative and fiscal measures in controlling a global phenomenon means that inflation might remain above 7 per cent for the time being.

Stock Market Prediction for 20th May 2008

Market may open down. Market would be volatile & show significant ups and down. Market may up between 11.40 and12.10. Market may steady or up side between 13.40 and 14.05. Market may close at up to previous closing.



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Opening Bell Call
Buy
RELIANCE - Reliance Industries Ltd
EDUCOMP - Educomp Solutions Limited
HINDPETRO - Hindustan Petroleum Corporation Ltd.
GMRINFRA - GMR Infrastructure Limited
DLF - DLF Limited
BLUECHIP - Blue Chip India Ltd
HCC - Hindustan Construction Co. Ltd


Opening Bell Call
Sell
ACC - ACC Limited
MRPL - Mangalore Refinery and Petrochemicals Ltd.
ADLABSFILM - Adlabs Films Limited
PARSVNATH - Parsvnath Developers Limited
ABB - ABB Limited
POWERGRID - Power Grid Corporation of India Limited

Technical Analysis for 20th May 2008

BSE-SENSEX - Major Support - 17415, 17374, 17333, 17283, 17233, 17142
BSE-SENSEX - Major Resistance - 17465, 17515, 17556, 17597, 17688, 17779

NSE-NIFTY - Major Support - 5143, 5131, 5119, 5101, 5082, 5051, 5021
NSE-NIFTY - Major Resistance - 5162, 5180, 5192, 5204, 5234, 5265, 5295

Indian Stock Markets will remain closed on 19th May 2008

The Bombay Stock Exchange (BSE), The National Stock Exchange (NSE) and forex market will remain closed on 19th May 2008 Monday, on account of Buddha Purnima.