Wednesday woes...Bears check in- Wait and watch

The SEBI discussion paper coupled with global weakness will see a sharp fall at start. Therefore, we are avoiding any calls before the bell.

Wait for attractive levels and pick up stocks for the medium to long term. And in case of a sharp bounce back in the coming days, no harm in booking profits.

It’s set to be One Fine Day for the bears who have all it takes for things to go their way. Liquidity may see a pipe burst as SEBI’s paper suggests foreign institutional investors may not be allowed to issue or renew offshore derivative instruments. In fact they may be required to extinguish existing participatory notes in 18 months. The regulator has sought a response to proposals by Oct. 20.

The rupee is set to fall from near a 9 1/2-year high. Who knows, the optimists may look at some IT counters at lower levels.

Federal Reserve Chairman Ben Bernanke warned in a speech that weakness in the housing market would likely drag on growth through early next year. Federal Reserve Chairman Ben Bernanke said the central bank's rate cut in September has shown signs of success, but cautioned that lenders and investors must bear responsibility for financial decisions that caused the subprime mortgage meltdown.

The Nasdaq and Dow are down less than a percent.

Among the Indian ADR’s, HDFC Bank was the major loser, it fell by over 10%. Others like ICICI Bank, Satyam Computer, Sterlite Industtries and Patni Computers declined over 5% each.

Japanese stocks slipped after Wells Fargo & Co. said it lost almost $900 million on home equity and consumer loans, renewing concern the U.S. subprime mortgage crisis will reduce earnings at financial companies.

Sun Pharma receives receipt of covenant on generic Effexor XR ANDA
Volatility to continue!

Volatility was back on the bourses as markets closed on a flat note. Alternate bouts of buying and selling often tossed the key indices in positive and negative terrain. However, after hitting a low of 18,777, benchmark Sensex recovered over 250 points to end almost unchanged.