Money Tree

The inflation as announced today for the week ended on 12th May 2007 stood at 5.27 as compared to 5.44 the previous number. This is slightly above the expected level, however it has improved from the previous level and is marching towards the targeted level of below 5.
The inflation number is being watched closely by the Reserve Bank of India as it may need to take some measures to bring it below the desired level.
The rupee has found support between 40.55 to 40.60 levels, some traders predict that RBI has started intervening and may not let the dollar fall below 40.5 levels. A big quantum of foreign money is expected to come into the system in the coming month and then it would become very difficult for the dollar to hold above Rs. 40 levels. Some experts are now contemplating another CRR hike by the RBI to suck the excess liquidity from the banking system.

Markets recover after opening weak in the morning

The markets have recovered significantly from the lows of the morning and the NIFTY has now crawled back to near 4200 levels. The NIFTY had breached 4150 levels in the morning following the weak global cues.

What’s dragging the NIFTY down?
Almost all the NIFTY stocks are down a bit and Gujrat Ambuja, Reliance Industries and VSNL are down more than 1 percent.
Suzlon is up more than 7 percent at Rs. 1238 on back of news that it has been successful in the acquisition of REpower and now Suzlon directly and indirectly controls 60 percent of its stake. Suzlon has helped NIFTY recovering from the losses of the morning as it is the largest puller on NIFTY.