INDIA

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DECEMBER
The BSE SENSEX closed today i.e. 30th Nov'04 at an all time high of 6234. The BSE SENSEX on 9th Jan'04 tested an all time high of 6249.50 but closed at 6199. The BSE SENSEX created history today by closing at a very bullish level of 6234. Up smartly 5.8 % from the Nov'04 close of 5891. The intra month high and low for the month of Nov'04 were 6248 and 5878. The BSE SENSEX just fell short of testing the all time high of 6249.50 as on 9th Jan'04.

The BSE SENSEX was bullish in Nov'04 as predicted. The SENSEX breached the 6000 level easily. It also broke all important level of 6150 in Nov'04. FIIs were very aggressive buyers of Indian Equities. FIIs pumped in around US $ 1.2 Billion into Indian Equities in the month of Nov'04. In the calender year 2003 - FIIs pumped in US $ 6.59 Billion into Indian Equities. In the calendar 2004 till 30th Nov'04, FIIs have already pumped in approx US 7.0 Billion. It is expected that in calendar 2004 - this figure might be close to US $ 8.0 Billion. In other words analysts feel that in the month of Dec'04 - FIIs will pump in US $ 1.0 Billion into Indian Equities. If this happens, then the BSE SENSEX will easily go past the all time high of 6249.50 and will enter into ' Unchartered Territory '.

FIIs were very aggressive Buyer's into the frontline IT Sector, Banking and Auto Component Sector Stocks in Nov'04. Indian Operators were very active in the Mid Cap Stocks. Mid Cap Stocks are having a dream run but some of these Stocks are not based on fundamentals. Investors have already been cautioned not to invest into Mid Cap Stocks without checking the fundamentals.

We feel the BSE SENSEX will be in a bullish mode in Dec'04. The levels to watch are :

S1 6150 S2 6000 S3 5880
R1 6250 R2

Beyond 6250 the BSE SENSEX could be heading anywhere. It could test 6500 to 6700 levels in the next few months to come. This depends primarily depends on the FII activity. FIIs have favoured Indian Equities ahead of China and Brazil. If FIIs pump in another US $ 1.0 Billion in Dec'04 as anticipated by the analysts then we can see a level of 6400+ in Dec'04 itself. We feel that BSE SENSEX will give a sharp 200+ point reaction after crossing 6250 levels. At this reaction we recommend investment into four new Stocks.

We are recommending four additional Stocks to be bought for medium to short term horizon ( 3 to 6 months ) as below :

1. TIMKEN INDIA : It is a leading manufacturer of Taper Roller Bearings and is a Indian Subsidiary of Automotive/Railways Bearing Giant - TIMKEN Inc. of USA. It closed today i.e. 30th Nov'04 at Rs.69.00. Its 52 week high and low are Rs. 87.00 and Rs. 33.00. Keep a buying target figure of Rs. 60 to 62. Target price Rs. 120+

2. CUMMINS INDIA : It is a leading manufacturer of Diesel Engines in India both for Automotive and Stationary use. This company too is now an Indian subsidiary of CUMMINS Inc. USA - a global giant in Diesel Engines. It closed today at Rs. 125.00. It's 52 week high and low are Rs.135.00 and Rs. 90.00 respectively. Keep a buying target price of Rs. 118 to 120. Target price Rs. 180+

3. UTI BANK : We did not recommend any Banking Stocks over the past two years as we were worried about the high level of NPAs. This Banking Stock closed today at Rs. Rs.166.00. It's 52 week high and low are Rs. 179.00 and Rs.84.00. Keep a buying target of Rs. 145 to 150. This Bank could be a " Takeover Target ". Investors are advised to keep watchful eye on this Stock as regards the volumes traded on the BSE or NSE. If the Stock is traded heavily - there is some action in the Stock. Target price could be Rs. 250 to Rs. 300.

4. STANDARD INDUSTRIES : This is an old Textiles Stock and closed today at Rs. Rs. 19.40. Buy this Stock at market prices - say Rs. 20.00 to 21.50 We feel this Stock will be Rs. 40.00++ in a matter of three months. Post Textiles QUOTA Dismantling from Jan'05 onwards - this Stock will see a frenzied activity. EXIT from this Stock at Rs. 40.00.

We had recommended some Stocks in Oct'04. A brief synopsis :

1. HELIOS and MATHEWSON : This Software Stock tested a level of Rs. 211.00 on a cum-bonus basis. We hope investors booked partial profits. Anyway it closed today ex-bonus level at Rs. 88.00. We advise Investors to stay invested. We stick to our target price of Rs. 180.00++

2. MRPL : This is our multi-bagger of 2004-05. It closed today at Rs. 45.00. Stay invested. We stick to our price of Rs. 100.00++.

3. ARVIND MILLS : This Textile major closed today at Rs. 114.00 up smartly from Rs. 84.00 as of 4th Oct'04. It tested a new 52 week high of Rs. 119.00 in Nov'04. Stay invested. We stick to our target price of Rs. 250.00.

4. GTN TEXTILES : This Cotton Yarn major closed today at Rs. 72.00 ( new 52 week high ) up smartly from Rs. 53.00 as of 4th Oct'04. Exit at Rs. 80.00+

5. PETRONET LNG : This closed at Rs. 23.40 marginally down from Rs. 24.00 as of 4th Oct'04. Stay invested. This will be multi-bagger of 2005-06.

6. TCS : This Indian Software major closed at its new 52 week high of R. 1287.00 up smartly from 1081.00 as of 4th Oct'04. Stay invested. This is a Stock for every Indian Investor's Portfolio. Stay invested.

7. L & T : This Engineering Major closed today at its new 52 week high of Rs. 912.00 p smartly from Rs. 874.00 of 4th Oct'04. This is a Stock for every Indian Investor's Portfolio. Stay invested till further advise.

In August 2002 we had recommended LIQUOR and SPIRITS Stock - McDOWELL at a level of Rs. 45.00. We had predicted that this Stock will be Rs. 150.00 in about one year's time. We were off by 12 months or so. McDOWELL closed today at Rs. 124.00 but tested a 52 week high of Rs. 136.00 in Nov'04. This Stock will be Rs.150.00+ in the very near future. Investors who hold this Stock are advised to completely exit from this Stock at around Rs. 150.00. Some Market Pundits were making a laughing stock of our prediction in August 2002 about this Stock. These guys called me a few days back and were amazed about the bull run in the Stock. God has been kind !

We predict Stocks in our own queer ways and most of the time our long term predictions have been 'Bulls Eye'. We again repeat Investors who have the holding capacity for medium to long term and who follow our timely entry/exit directions, will for sure make big bucks in the Indian Stocks.

The Indian Stock Markets are in for a big Bull Run in the coming months and all the negative news is being discounted. Happy Investing in Indian Stocks !

NOVEMBER
The October 2004 closing is taken as 5th Nov'04 - weekly closing at BSE. BSE SENSEX closed today at a bullish level of 5891 up 1.8 % from 4th Oct'04 closing of 5785. As predicted BSE SENSEX corrected sharply in the month of Oct'04. The intra month high and low were 5901 and 5558 ( breaching S3 level of 5580 as mentioned in the forecast for Oct'04 ). US Light Crude at NYMEX tested record high of US $ 55.67 pbbl on 25th Oct'04. High Oil prices are a cause of worry globally as this would lead to inflation.

The FIIs are bullish on India and we predict that BSE SENSEX will test and even break the all important level of 6000 in Nov'04. At any level above 6000 - INVESTORS ARE ADVISED TO BOOK PROFITS.

The levels to watch in Nov'04 are :
S1 5840 S2 5750 S3 5680
R1 5940 R2 6000

No new Shares are being recommended. It is the time to take profits home, if any !

OCTOBER
The Sept'04 closing is taken as 4th Oct'04.
BSE SENSEX closed today at a whopping bullish level of 5785 up 10.2 % from 6th Sept'04 closing of 5246. We had predicted that BSE SENSEX would not breach the 200 DMA level of 5375 but due to very heavy FII buying after mid Sept'04 the BSE SENSEX turned extremely bullish. Bears were running for cover !

The intra month low and highs for Sept'04 for the BSE SENSEX were 5240 and 5785. Mid Caps rallied like mad bulls - some with little floating stocks and almost nil fundamentals. We had advised investors to stay away from these stocks.

Aggressive FII buying towards mid September in the front line blue chips in Oil and Gas, Petrochemicals, Heavy Engineering Machinery, Cement, Steel, Sugar,Textiles and Cotton Yarn sectors propelled BSE SENSEX past the confirmed bullish trigger of 5720.

The Securities Turnover Tax ( STT ) was effective in the Stock Markets w.e.f. 1st Oct'04. The same was well received by all section of investors - FIs, FIIs and individual investors. There were some apprehensions on the implementation of STT by the Indian Stock Market Regulator - SEBI, which were cleared to everybody's satisfaction by the last week of Sept'04. This further propelled the BSE SENSEX.

There is only 10 % capital gains tax on short term stock trading profits and nil capital gains tax on long term profits ( beyond 12 months ) as per the Budget announced in July'04 by the Indian Finance Minister. This was a good news for all sections of investors but the ambiguities in implementation of STT was not reflecting truly on the Indicies since the announcement a few months back. Once SEBI clarified as mentioned above - bulls moved into the Stock Markets aggressively in the last week of Sept'04. Short sellers were trapped and rushed in to cover their positions. This always adds further impetus to the Indicies.

FIIs pumped in close to US $ 600 Million into Indian Equities in Sept'04. Bulk of this investment was done after mid Sept'04. FIIs were dormant in Aug'04. FIIs pumped in close to US $ 1.0 Billion each in Taiwan and South Korean Equities during the same period.

The BSE SENSEX is now in a bullish mode with the under current also in the same mode. It is well above the 200 DMA level of 5420 and will find a very strong support at a level of 5720.

The BSE SENSEX will correct sharply in the coming weeks and may then head towards an all important level of 6000! There are a few concerns which are entailed towards the end of this update.

The levels to watch in Oct'04 are :
S1 5720 S2 5640 S3 5580
R1 5840 R2 6000

We are recommending a few stocks as below for medium and long term investments. Investors who have a long term perspective have gained enormously on our advise. Investors to enter when the BSE SENSEX corrects sharply in Oct'04 or accordingly as the case maybe.

Medium Term:
For the next six months or so we fancy

a) HELIOS and MATHEWSON : A new kid on the block in the midcap software sector with strong fundamentals. It closed today at Rs. 123. This price is with 1:1 Bonus and we hope ex-bonus price would be around Rs.80 to 90. The 52 week high and low levels are Rs. 184 and Rs. 22 respectively. We expect this Stock to test Rs. 180 to 200 in the next six months from the ex-bonus level of Rs. 80+. This is a turnaround story.

b) MRPL : This is our multi bagger for 2004 ! We are extending the same to 2005. It closed today at Rs. 45. We expect MRPL to be profitable company in 12 calendar months from now. It has started generating cash profits and we hope by 31st March'05 or 30th Sept'05 the company would have have wiped out all its accumulated losses ( Rs. 6271 Million ). As on 31st March'04 the cash profit was Rs. 4594 Million and accumulated losses were Rs. 6271 Million. Substantial improvement in performance YoY. We feel MRPL will be a dividend candidate by 30th Sept'05, if not earlier. We expect the price to be
Rs. 100+ in six months time as the stock markets discount the future.

Long Term :
The following are being recommended for 12 months perspective in mind. These Stocks will give substantial returns as per our understanding in the long term as they are fundamentally strong stocks and are leaders in the pack in their sector.

1. ARVIND MILLS : This textile major is our fancied Stock in this sector ahead of RAYMOND and ZODIAC. It closed today at Rs. 84. The 52 high/low levels are 85/41 respectively.

We feel post 2005 April when the Quota Regime will be dismantled globally under the MFN Agreement - ARVIND MILLS will be the best gainer in the textiles sector. ARVIND is adding capacity to manufacture garments on an international scale with global benchmarks. It is already the world's second largest denim producer in the world. Plus now vertically integrated up the value chain for manufacture of garments apart from denim garments. We feel this Stock will be Rs. 250+ in the long term.

2. GTN TEXTILES : As a corollary to the bullish trend in the Indian Textiles sector - the Indian Cotton Yarn Sector is another growth story. We prefer this medium sized niche yarn producer with conservative yet professional management over the yarn biggies viz NAHAR,VARDHAMAN and MARAL.

GTN closed toady at Rs. 53. The 52 week high/low levels are 60/27 respectively. We expect this Stock to test a level of Rs. 80+ in the long term.

3. PETRONET LNG : We have fancied Oil and Gas sector over the past three years or so. Long term investors have made huge gains on our recommended stocks in this sector - IBP and ONGC.

LNG - Liquefied Natural Gas is the fuel of the future for Power Generation, Urea and host of Other Industries which consume large amounts of energy. It is a clean fuel. PETRONET LNG is promoted by PSU Oil Giants in India ( IOC, GAIL etc. ) with equity participation by the LNG supplier from Qatar. This is a joint-stock company which will Re-gasify the imported LNG at two major ports on the west coast of India and then transport the same through out the Nation. It is laying pipeline grid covering almost all user geographical areas in India.

We feel this is another multi bagger stock for 2005. It closed today Rs. 24. The 52 week high/low levels are 27/14 respectively. In the long term this Stock could be Rs. 45++.

This is one Stock which we advise long term investors to add to their portfolios and keep for three years or so. It could test Rs. 250+.

Must for a long term investors portfolio.
4. TCS : India's largest Software company was not floated on the Stock Markets. It was closely held by TATA SONS - India's biggest industrial house TATAs. The recent IPO from TCS was oversubscribed and well received by all sections of investors - FIs, FIIs and individual investors.

It closed today at Rs. 1081 - its new high since the IPO in Sept'04. Its low is Rs. 959. We feel long term investors should have this Stock in their portfolios for the next couple of years.

Over the next twelve months or so we feel that the investors should get 100 % returns on this Stock.

5. LARSEN : Our old favourite, now a pure Engineering Company. Investors who missed are now advised to buy this de-merged stock for long term. It closed today at Rs. 874. Since its debut post de-merger of Cement Business it has tested a high of Rs. 899 and a low of Rs. 636.

As advised in our Aug'04 Update - This Engineering Giant Stock is a must for every long term investor. From these levels of Rs. 800 to 850 we see a 100 % return on investment in the next twelve months or so. Over the next couple of years - long term investors can expect multiple gains.

As usual we address concerns too in our update.

i) Crude Oil prices above US $ 50 pbbl are a sure cause of worry. Although this level is not sustainable but one never knows what can happen in Niger Delta or Iraq or Venezuela or even with Yukos ? Any disaster in these areas could propel Crude Oil to US $ 54++.

ii) India's FDI is too low as compared to China. China's FDI in 2004 is estimated at US $ 60 Billion. India's FDI in calender 2004 would not exceed 4.5 Billion. India needs FDI to upgrade its roads, ports etc. in the Infrastructure Sector.

iii) China Factor. We had mentioned in our Aug'04 update that China would be under pressure to de-value its currency - Renimbi or Yuan. America is putting pressure on China to do exactly the same !

Investors to keep a keen eye on the China Situation. Chinese have recently admitted to the world media for the first time that that their banking sector needs reforms before they open their markets as per WTO Guidelines. Please go through our comments on the China Factor in our Aug'04 Update. What we predicted seems to be coming true !

SEPTEMBER
The BSE SENSEX closed today i.e. 6th Sept'04 at level of 5246 up approx. 1.0 % from the 2nd Aug' 04 close of 5202. The intra month high and low for the BSE SENSEX was 5269 and 5022. This low was tested after the price of US Light Crude tested US $ 49.40 pbbl at NYMEX on Friday - 20th Aug'04. We had predicted in the Special August'04 Update that if US Light Crude Oil futures close above
$ 45.50 level for three consecutive days at NYMEX , then the price of Crude Oil would test $ 50 level at NYMEX. We were just short on our prediction !

The BSE SENSEX would be range bound for the month of Sept'04. There is a major resistance at the 200 DMA i.e. 5375. The 100 DMA for the BSE SENSEX is at a level of 5125. The levels to watch are as below :

R1 5375
S1 5200 S2 5125 S3 5040

We feel the BSE SENSEX will move between 5040 and 5375. Some pundits are predicting that the BSE SENSEX will breach past the 200 DMA of 5375 and then from this level gain another 100 to 150 points. We feel this level of 5375 will not be breached.

FII activity is limited on the Indian Stock Markets. FIIs poured more funds into equities in South Korea and Taiwan in Aug'04 as compared to India. We feel this trend will continue and FIIs will not buy Indian Equities aggressively in the near future due to inflationary pressures in the Indian Economy and lack of equity culture on the retail level in India as compared to other Asian economies as above.

Domestic Operators have taken a fancy to Mid Cap Stocks in Textiles, Paper, Auto and Metals Sector. These Mid Cap Stocks have liquidity problems. We do not advise Investors to put funds into Stocks which are not liquid - float is less. In turbulent times it is not easy to get out of these Stocks. We prefer to invest funds in frontline blue chip fundamental stocks in respective sectors.

Yes, there is enough money to be made in Mid Cap Stocks but we feel that most of these Stocks are and can be easily manipulated by Operators and Fund Managers as the Equity is small and aggressive buying can propel prices and vice a versa. These Stocks are risky as per our judgement. Investors can easily be trapped in these Stocks. Stay away from these Mid Caps until there is a M & A or a Turnaround Story. We will advise if there is/are any sure bets in these Stocks.

One issue which is bothering us is the continued pressure from the Left Front on the Govt. to slow down the Reforms Process in India. The ruling Congress Party is supported by the Left Front which has Communist Agenda. We feel that the Indian Stock Markets cannot be bullish unless this Left Front is 'out of the scene'. Unfortunately this cannot happen in the present circumstances as the Govt. cannot remain in power without the support of the Left Front.

Hence we feel that BSE SENSEX will not breach the 5375 level in the near future. Traders can have a field day with Mid Cap Stocks!

SPECIAL AUGUST OIL UPDATE
We had mentioned in our forecast for August'04 that US Light Crude Oil may test US $ 45.45 pbbl. It tested this level on 12th Aug'04 at NYMEX. Bull's Eye !

Three consecutive closings at NYMEX above a level of US $ 45.50 pbbl will propel the Crude Oil prices into unchartered territories. Very serious situation if the Crude Oil prices spiral out of control and test a level of US $ 50 pbbl as per some petroleum sector analysts at leading global brokerage houses. We also feel this level of US $ 50 pbbl is a distinct possibility now.

Stock Markets will crash worldwide. Hence we advise global investors to completely exit from all equities except core oil exploration companies - SHELL, MOBIL-EXXON, BP etc.
Indian investors have already been advised to only stay invested in ONGC and MRPL. We stick to our recommendation.

Enter LARSEN and TOUBRO now at around Rs. 650 levels as we expect Indian Stock Markets to be bearish.
YUKOS, VENEZUELA and now IRAQ factors are weighing very heavy on global Crude Oil prices which are showing no signs of weakening on the charts.

We advise investors in India to completely exit out of all equities including Sugar and Commodity Stocks.
Stay invested only in ONGC and MRPL or other Oil Stocks viz. IOC, HPCL, BPCL etc.
Chaotic situation ahead.

AUGUST
The BSE SENSEX closed today i.e.2nd Aug'04 at a level of 5202, up 7.3 % from the July 14 closing of 4847. The prime reason for this rally was that two issues - Turnover Tax on Equities and progress of SW Monsoon, were both addressed favourably. Former by the Indian Finance Minister and latter by the Almighty.

Turnover Tax concessions were announced by the Hon. Finance Minister to the satisfaction of all players in the Indian Financial Markets - FIIs, FIs,Banks, Day Jobbers, Investors and Brokers.

SW Monsoon although late by 4 weeks or so did finally shower well on the dry and parched areas of Central and North Western India. About 25 % of India's GDP still comes from Agriculture and most of the same is heavily dependent on the SW Monsoon rains.

The BSE SENSEX highs and lows for the period 14th July - 2nd Aug'04 were 5211 and 4845 respectively. We predict BSE SENSEX to be bullish for the month of August'04 but will face a major resistance at its 200 DMA i.e. 5340. The levels to watch are :

R1 5240 ( 100 DMA ) R2 5340
S1 5150 S2 5000 S3 5940

The Indian Stock Markets are now in sync with global markets. The Crude Oil prices and the American Terror Alert are two factors which loom large on the Global Stock Markets of which DJIA is the undisputed king. The former adds inflationary pressures on the consumer retail indices worldwide and the latter keeps investors at bay as the fear of terrorist attacks are a big negative.

These two factors will cast a doubt on the Global Stock Markets which take cues from the American Stock Market. Crude Oil tested an all time high US $ 43.92 pbbl at NYMSE for US Light Crude today - a level never seen since 1983 when Crude Oil Futures trading started at NYMSE. Situation in Iraq, Problems with YUKOS and Political turmoil in Venezuela are not getting better either. Crude Oil will remain firm - above US $ 40 pbbl in the next six to eight weeks. Do not be surprised if US Light Crude Oil tests US $ 45.45 within the next four to five weeks.

We forecast a major terrorist attack in Paris within the next four to five weeks by Islamic Militants who may have links to UBL. There may not be a major terrorist attack in USA in the near future. But with Paris burning - markets will crash worldwide. We hope our predictions about Paris are not correct.

One more factor which is of concern to global investors is the China Factor - IMF has long ago said in its annual report that four of China's largest Banks - Bank of China, China Agricultural Bank etc. are technically insolvent. The Chinese Govt. is re-capitalizing these sick Banks to keep them afloat. No one really knows what is the actual level of NPAs of these four large Chinese Banks plus the NPAs of China's Regional Banks.Some western economists estimate that the NPAs of the Big Four in China would exceed US $ 600 Billion. To stem the GDP Growth in China i.e. 'slow down' the 'over heated economy' - Chinese think tank is now seriously reviewing the possibility of devaluation of their currency - Renimbi or Yuan. For years now, Renimbi has been pegged constant to the US $, whereas currencies in Asia have depreciated since 1997 against the US $. JAPANESE YEN, THAI BAHT, PILLIPINO PESO, MALAYSIAN RINGITT, PAKISTANI RUPEE and INDIAN RUPEE have all depreciated between 16 to 28 % since this period. China has not revalued or devalued its currency while all Asian Economies have adjusted their currencies.

We predict that China will devalue its Renimbi before Nov'04. When this happens - commodity prices worldwide will crash. Wheat, Edible Oil, Fertilizer, Iron Ore, Steel, Alumina, Aluminium etc. prices will be depressed as China will import less of these commodities which it is currently gulping ! Investors are advised to completely exit all commodity stocks except GOLD.

For the Indian Investors the same applies. Please exit from SESA GOA, TISCO, HINDALCO, NALCO, - these are Stocks of Iron Ore/Steel and Aluminum Companies which are exporting their produce in substantial ratios of their total production. Investors can
re-enter these Stocks later as and when advised. As of now we feel that it is the time to exit from these Indian Commodity Stocks.

Indian Investors are also strongly advised to completely exit from Sugar Stocks in the next two months or so, if they are holding the same. Sugar prices are having a dream run and the bottom lines of Indian Sugar Cos. are very healthy. Remember Stock Markets discount the future always. We predict that India will be short on Sugar in the next six months or so. Govt. of India will have no option but to allow free import of Sugar like in the late 90s. The Sugar prices will be depressed as cheap imported Sugar from Brazil, Philippines, Thailand etc. will flood the Indian Markets. Hence we feel it is the right time to exit from Indian Sugar Stocks - BALRAMPUR CHINI, BAJAJ HINDUSTAN, THIRU AROORAN etc.

We had mentioned that we will re-view engineering major - LARSEN & TOUBRO Ltd. ( L & T ) post de-merger of its Cement Business.
De-Merged L & T was listed on BSE on 23rd June'04 at Rs. 636. L & T now has a face value of Rs. 2.00. It tested a high of Rs. 807 on 22nd July'04 at BSE. We strongly recommend this Engineering Company's Stock at Rs. 750+ levels. Must for every Indian Investor's Portfolio who has a long term perspective.

We advise investors to re-enter ONGC and MRPL. ONGC is defensive stock. MRPL is our multi-bagger for 2004.

JULY
The Update for the month of July'04 is delayed on account of Union Budget which was announced on 8th July'04 and also on account of SW Monsoon which has a big impact on the Indian Economy.

The BSE SENSEX closed today ( 14th July'04 ) at a level of 4847, about 1% lower as of 4th June'04. The Budget announced by the new Govt. has lead to a lot of confusion amongst the coalition partners. This has resulted to a debate in the Govt. regarding the rollback of some decisions and some compromises. The details of the Budget are available on MoF's Website. The Budget is Farm Sector Reforms Oriented but a lot of sectors have been left out in the lurch. The Left Parties are against Market Reforms and increase in FDI in Telecom and Insurance Sectors. The Govt. has to deal with these difficult issues.

There are possibilities of a rollback of Turnover Tax on the Equities and other Financial Instruments Traded. Nothing is clear and hence we are going to wait till end July'04 for further predictions for the Indian Stock Markets.

SW Monsoon is also playing hide and seek ! The prediction by the Met Department was that the Monsoon would be more than normal. The onset was good but now it seems that SW Monsoon may not be as good as predicted. If the SW Monsoon does not progress well in the next three days further north west then the Stock Markets will go southwards.

Keeping in view the uncertainty of the Budget Rollbacks and Concessions plus the possible Partial Failure of the SW Monsoon, we advise investors to completely stay away from the Equities Markets. The BSE SENSEX may crash to 4200 levels if the SW Monsoon fails to proceed further towards Northwest in India and the concessions are not announced by the Finance Minister on Turnover Tax on Equities.

JUNE
The closing of May'04 is taken as 4th June'04 - Friday. The BSE SENSEX closed today at 4889 - down 3.5%.The BSE SENSEX closed on 14 May'04 at 5070, down a whopping 329 points. This crash was followed by the worst ever intra-day crash in the 129 year history of BSE. The BSE SENSEX crashed by 16.6 % on Monday - 17th May'04 from a level of 5070 to 4227 ( down 16.6 % intra-day) before recovering to close at 4505. Down 565 points i.e. 11.1 %. This is the single largest daily fall in the history of BSE since its inception 129 years back. Political uncertainty was the main reason as no political party got a majority in the results of the General Elections. FIIs were heavy sellers of Indian Equities.

We had advised investors to completely exit the Indian Equity Markets well in time. We predicted in the last update that there will a heavy bear hammering in Indian Equities. Exactly the same happened. The intra-month highs and lows from 17th May'04 to 4th June'04 were 5213 and whopping 4227.

As predicted by us as one possibility - Indian National Congress Party formed the Government in New Delhi with outside support from the Left Front ( Communists ). The Indian Stock Markets regained their lost ground after the new minority Govt. was sworn in with the support of Leftists who propagate populist policies and are anti-reform. The Prime Minister was a surprise candidate - a bureaucrat turned politician - Dr. Manmohan Singh. Dr. Singh - a renowned Oxford educated economist who is hailed as India's Reforms Man, has held many important positions in his life as a bureaucrat. He was the Governor of India's Central Bank - Reserve Bank of India. He was also Indian Finance Minister in 1991 to 1995 in the Congress Govt.

We feel that the Left Front will the call the shots in India with this minority Govt. in place in New Delhi. The Left Front is totally against economic liberalization and globalization. We fear that fiscal deficit may balloon up to 12 % of the Indian GDP in this fiscal if the Left Front has its way. They have a firm grip on this Congress lead Govt. as they are against scrapping or lowering of Petroleum and Farm Sector subsidies. The PSU Oil companies will face the music in the coming months and maybe years. No one knows when will the Left Front withdraw support to the Congress Govt. Congress Party does not have the numbers in the lower house of the Parliament to run the Govt. without the support of the Left Front. A very sad state of affairs but the facts are facts.

WE ADVISE INVESTORS TO STAY AWAY FROM THE EQUITY MARKETS TILL FURTHER ADVISE. PARK FUNDS IN LOW YIELD BUT SECURE DEBT FUNDS OF THE PRIVATE BANKS OR FIIs.

MAY

The update is delayed on account of Indian General Election Results, which were declared on 13th May'04.

The ruling BJP led NDA Govt. lost the people's mandate and the serving Prime Minister and his team of Ministers resigned today i.e. 15th May'04. No one ever thought that the ruling NDA Govt. would be voted out of power. We mentioned on the 6th May'04 forecast that the Third Front could form the Govt. in New Delhi with the support of the Congress Party. Who knows - our prediction may come true ? In politics anything can happen.

There was no single political party with a clear mandate to form the Government in New Delhi as per the results announced by the Election Commission. However the single largest party was the main opposition party - The Indian National Congress. But the problem is that even the Congress Party cannot form a stable Govt. in Delhi without the support of the Left Front which is dominated by the Communists.

The BSE SENSEX closed today i.e. 14th May'04 (Black Friday ) at a whopping low level of 5070. Down 12 % from the 2nd April'04 level of 5788. The fall in the BSE SENSEX today was 329.00 points or
6 % - highest fall in a single day since 4th April 2000, when it fell 361.48 pts. It was bloodbath, carnage, mayhem - call what you may on BSE and NSE in India on Black Friday. The intra month highs and low were 5979 and 5044.

The main reason of this fall on the Stock Markets was that the Indian National Congress cannot form the Government without the support of the Left Front. The Left Front dominated by the Communists has clearly spelt out that they will only support the Congress Party if the Profitable PSUs are not disinvested and privatized, Disinvestment Ministry is scrapped, Labour reforms are put on hold, Subsidy to farm sector is increased, Oil sector subsidy is not cut inspite of soaring Crude Oil etc etc. Communists are demanding their pound of flesh after a long time ! FIIs do not like back tracking of Reforms which the NDA Govt. was pushing very successfully. Hence Foriegn Hedge Funds and FIIs dumped Indian Stocks on this Black Friday.

There is political instability in India as of now. This is very bad for the Indian Stock Markets. FIIs have invested close to US $ 7.00 Billion in the Indian Equities over the last eighteen months or so.
Imagine the BSE SENSEX if even 3.50 Billion Dollars are
re-deemed by the FIIs from Indian Equities. BSE SENSEX could be anywhere between 3800 to 4800 levels depending on the FIIs Selling or Exit India Equity policy for a few months or till the next General Elections. We do not know what stand FIId will take as it is contingent on political scenario in India ? Unfortunately - We are not experts at predicting political events.

The Left Front may only support the Congress Party from outside and may not join the Government. Then the Congress Party will have even more difficulty in forming a stable Govt. as it would need support from a few more small regional political parties.

Political instability is a big big negative for the Stock Markets. We feel that even if the Congress Party is able to muster enough support and it forms the Govt. in New Delhi - the Coalition would be on a shaky foundation. Anytime the Congress led Coalition Govt. could be swept away from power on account of Communists and Socialists putting roadblocks in the Reforms Process. Also these set of alliance partners will force Congress Party to announce populist measures which are big drag on the National Treasury.

WE ADVISE INVESTORS TO COMPLETELY EXIT FROM THE EQUITY MARKETS ASAP AND SWITCH THEIR FUNDS TO LOW YIELD DEBT MARKET. WE FEEL THE INDIAN STOCK MARKETS ARE IN A FOR A BEAR PHASE TILL A NEW STABLE GOVT. IS IN PLACE IN NEW DELHI.

There might be very strong bear hammering in the Indian Stock Markets in the balance two weeks of May'04. There could be a sharp technical rally of about 150 to 300 points or so on the BSE SENSEX, but this seems unlikely. If there is a sharp technical rally on account of Congress Party forming a Govt. - Use this rally to exit from the Equity market completely. Do not be emotional. Just convert your investments from Equity to Debt until further advise.

On 13th May'04 - US Light Crude tested an all time high of
US $ 41.57 pbbl in New York. This level is higher than that of October 1990 when the US Light Crude hit US $ 41.15 pbbl in New York. Higher Oil prices give rise to inflation and global markets head southwards. Global Investors should keep a close tab on the Crude Oil prices. It is time to partially switch from Stocks into physical Gold or Gold Futures in the Global Markets. Gold might test US $ 450 pto in the near future. We prdeicted in Dec'03 that Crude Oil will test US $ 40 mark in the short term !
The update for May'04 will be done between 13th and 15th May'04 as we expect the results of the General Elections on the 13th May'04. By 15th May'04 we will have some clarity who is going to form the next Govt. in New Delhi.

If a stable Govt. is formed by the BJP led NDA Coalition then the Indian Stock Markets will be very bullish.

If an unstable Govt. is formed by the Third Front supported by Congress then the Indian Stock Markets will crash. In this case Investors should exit Equity Markets completely.

We will advise Investors accordingly between 13th and 15th May'04.
We regret we are delaying the May'04 forecast by two weeks.

APRIL
The closing of March is taken as 2nd April'04 ( weekly closing at BSE ). The BSE SENSEX closed today at 5788 down 1.6 % from the Feb'04 closing level of 5880. The intra month highs and lows were 5951 and a whopping low of 5325. The Stock Markets were bearish in the second and third week of March'04 as against our prediction of being bullish. The Markets were bearish on account of fiscal year ending profit booking by domestic FIs and Indian Investors.

BSE SENSEX breached even the S4 level of 5600 in the month of March'04. It in fact tested a low of 5325 as mentioned above. Heavy profit booking by Indian Mutual Funds as the financial year closed on 31st March'04. On the positive side the BSE SENSEX could only break the R1 level of 5740 as forecasted for the month of March'04.

The BSE SENSEX showed remarkable recovery towards the end of March'04 after the GoI announced that Indian GDP growth was 10.4 % in Q3 of the current fiscal ( Oct'03 to Dec'03 ). In India the fiscal year is from 1st April to 31st March. This news brought backs bulls to the Indian Stock Markets. FIIs returned back to the ring !

We feel that BSE SENSEX will be range bound in April as the Nation goes to polls in April'04. The election results would be available in the beginning of May'04. However we expect the under tone to be bullish as poll analysts predict the return of the current BJP lead NDA Coalition Government. In this event the Indian Stock Markets will be firm control of bulls and we predict that the BSE SENSEX will break the R3 level of 6250 convincingly. FIIs will be active Buyers of Indian Equities. Even domestic FIs and other Indian investors will be active buyers in the Stocks. Retail Investors will also join the bandwagon ! It will be a beginning of a new bull phase in the Indian Stock Markets. We will advise investors accordingly maybe by a 'special update' close to or after the election results.

BSE SENSEX will be range bound for April'04 with a bullish undertone. We predict the BSE SENSEX to oscillate between 5600 to 6000. However the levels to watch are :
R1 5850 R2 6000 R3 6150 R4 6250
S1 5760 S2 5680 S3 5600 S4 5540

Investors are advised to sit on the fence with an intention to enter the Equity Market if the poll results are as per prediction of the analysts ! We do not forecast political events.

A stronger Indian Rupee is the spoil sport in the medium term ! The for the Indian Software Industry it is highly export oriented. The Indian Rupee has recently appreciated to level of Rs. 43.30 to a US Dollar. Stronger Indian Rupee hurts the revenue and hence the bottomlines of export dependent companies. Indian Software Majors like INFOSYS, SATYAM and WIPRO will have lower profits if the Indian Rupee appreciates further vis a vis the US Dollar. These Indian Software majors earn more than
80 % of their revenues from the North American Market and the currency is US Dollar.

A brief synopsis of a few our favorite and/or recommended Stocks.

- LARSEN : This engineering giant closed today at Rs. 526. We hope investors booked profits at Rs. 600+ as advised in Jan'04 update. This Stock tested a new 52 week high of Rs. 614 in March'04. Exit from this Stock.

- MRPL : This Refinery Stock now under the ONGC umbrella closed today at Rs. 56. We advise investors to stay invested in this Refinery Stock even though the margins are under pressure due to high Crude Oil prices. This Stock will be re-rated when ONGC buys out 17 % equity of HPCL in MRPL. This is likely to happen after the next government is in place by May'04 onwards. This Stock is a multi bagger for calendar 2004.

- TISCO : It closed today at Rs. 403. We advise investors to stay invested

- ONGC : It closed substantially higher today at Rs. 859. ONGC's maiden IPO of Rs. 100 Billion was oversubscribed by about 6 times by the close on 13th March'04. We advise investors to stay invested in ONGC as Crude Oil prices are firming up.

We had predicted in Dec'03 that Crude Oil could test US $ 40 pbbl levels in the near future. On 17th March'04 - US Light Crude April futures tested a level of US $ 38.81 in New York. This is a new 13 year high level. Highest since October 1990. We feel we will see a level of US $ 40 pbbl soon as predicted in Dec'03.

- HPCL : It closed today at Rs. 526. This Oil Refiner and a major Retailer tested a new 52 week high of Rs. 542 in the month of March'04. We had predicted last month that Oil and Gas sector stocks will be bullish ! Investors are advised to buy this Stock at market prices if the BJP lead NDA Government returns to power in the forthcoming polls. This will be first Stock to be disinvested or privatized if the said Government returns to power in New Delhi.

- NALCO : This PSU Aluminium major closed today at a strong level of Rs. 193. Book partial profits at Rs. 250+. Balance stay invested. It is a Rs. 450+ Stock if the said government returns to power in New Delhi. This Stock will be privatized.

- TATA MOTORS : It closed today at Rs. 496. Book profits or exit at Rs. 600+ in the medium term.

- RELIANCE : It closed today at Rs. 566. We hope investors booked profits at Rs. 600+. Exit from this Stock at Rs. 600+ levels if not done already as advised last month.

We are not recommending any fresh Stocks till we are close to the results of the forthcoming General Elections in India.

MARCH
The reference date for Feb'04 closing is taken as today i.e. 5th Mar'04 as we were waiting for the outcome of ONGC's - Rs. 100 Billion (US $ 2.22 Billion ) IPO to open on BSE/NSE on 5th March'04 morning. This is the single largest IPO in India's history and it made history of all sorts. GoI offered 10 % of ONGC's Equity between Rs. 680 to Rs. 750 band to the various Investors both in India and Overseas. In the first half an hour of trade ONGC's IPO worth Rs.100 Billion, was lapped up by Indian and Global Investors. By today evening the IPO was over-subscribed by 2.7 times. The IPO is open till March 13th and analysts predict it will be over-subscribed by 4 times. GAIL IPO was also on the offer today. It was a much smaller IPO ( US $ 300 Million ) but was over-subscribed by 8 times by close of today.We salute the Indian Disinvestment Minister !

BSE SENSEX closed today ( 5th March''04 ) at 5880 higher 4.6 % than Jan'04 closing of 5621. The intra month high and lows were 6083 and choppy low of 5556. SENSEX was choppy in the last week of Feb'04. As predicted BSE SENSEX was range bound between 5600 to 6000 levels. It however was very close to the S2 level of 5550.

FIIs were nett buyers of Indian Equities in the month of Feb'04 too. ONGC and GAIL IPO's were a step in the right direction. FIIs were active investors in the ONGC and GAIL IPO offerings. GoI's Disinvestment Target for this Fiscal ( Rs. 145.00 Billion i.e. approx. US $ 3.2 Billion ) will more or less be met with the super success of these two IPOs. Plus it is official now - GoI's Central Statistical Organization has declared that Indian Economy will grow this Fiscal at 8.1 % on an annualized basis. This makes the Indian Economy - The fastest growing Economy in the World !

We feel that BSE SENSEX will be bullish range for the month of March'04. FIIs will be active Buyers of Indian Equities. Fiscal Deficit will be stemmed for the current Fiscal ( ends on 31st March'04 ) as GoI will fetch close to Rs. 130 Billion from it's Disinvestment Programme. Political Parties had blocked the privatization of HPCL, NALCO, EIL, SCI etc. These Parties also blocked Disinvestment of BPCL. The Indian Disinvestment Minister in one stroke decided to meet the Disinvestment Target of the current Fiscal by placing ONGC's and GAIL's 10 % Equity in the Indian and Global Markets. It was a very bold move and paid dividends. Once again we congratulate the Indian Disinvestment Minister.

FIIs were always worried about De-railment of the Disinvestment Programme and India's Fiscal Deficit. With these two issues addressed by the Indian Finance and Disinvestment Ministers, we feel FIIs will pour more funds into the Indian Equities in the near future. Since Jan'04 FIIs have been chasing a few Indian Blue Chip Auto and Bank Stocks. Since the start of this Fiscal (1st April'03) FIIs have pumped in about US $ 7.0 Billion into Indian Equities and about 1.0 Billion into Indian Debt Markets. This is an astounding figure and shows the level of confidence FIIs have in the Indian Economy.

We did not put up any Banking Stocks on our Radar Screen this fisca inspite of the passing of the Asset Securitization Bill by the GoI. We were pessimistic about India's PSU Banks which have high NPAs. We feel that FIIs will focus on India's Oil and Gas Sector and Non-Ferrous Metals Sectors in addition to the Auto and Banking Sector Socks in the near future.

Merrill Lynch has predicted that BSE SENSEX will test 7600 level within the next 12 to 15 months We are even more bullish than Merrill Lynch - If the current NDA Govt. is returned to power in May'04 after the General Elections and the Indian Monsoon is above average in June-July'04, we predict BSE SENSEX will be 8000+ in Sept'04 itself. Investors to please note that this prediction is contingent on two factors - Return of the NDA Govt. in May'04 and a good Monsoon by July'04. Failing which BSE SENSEX might be around 4000 levels or lower. But we somehow have a gutfeel that the former will be true ! Cheers to the Indian Stock Markets.

We are bullish for the month of March'04. However the levels to watch are :

R1 5940 R2 6150 R2 6250
S1 5840 S2 5760 S3 5680 S4 5600

Investors can make fresh purchases of recommended Equities.

A brief synopsis of a few our favorite and/or recommended Stocks.

- LARSEN : This engineering giant closed today at Rs. 596. We hope investors booked profits at Rs. 600+ as advised in Jan'04 update. This Stock will be re-rated after De-merger and split. We advise investors to liquidate their holdings at these levels or Rs. 600+ levels. We will review after De-merger of Cement Division and Relisting of the split Stock.

- MRPL : This Refinery Stock now under the ONGC umbrella closed today at Rs. 58. We repeat MRPL is our Stock for 2004. We stick to our prediction of Rs. 200+ in calendar 2004. Investors can buy this Stock at these levels with a stop loss of Rs. 48. MRPL is now running at 100 % capacity utilization - Thanks to ONGC's Management.

- TISCO : It closed today at Rs. 442. Target price - Rs. 600, as revised in Dec'03 forecast.

- ONGC : It closed substantially higher today at Rs. 802 as its maiden IPO of Rs. 100 Billion was oversubscribed by about 3 times by close of today. ONGC could touch Rs.1500+ levels or more in the next nine months after the total De-Control of Natural Gas prices. Plus Crude Oil prices are firming up.

We had predicted in Dec'03 that Crude Oil could test US $ 40 pbbl levels in the near future. On 4th March'04 - US Light Crude tested US $ 37.20 in NY. This level is a new one year high for US Light Crude prices. Political crisis in Venezuela and OPEC Production Cuts may be the two prime reasons for the Crude Oil prices firming up. We feel we will see a level of US $ 40 pbbl soon as predicted in Dec'03.

- NALCO : This PSU Aluminium major closed today at a strong level of Rs. 180. Book partial profits at Rs. 250+. Balance stay invested. It is a Rs. 450+ Stock. This is our old favourite stock and now with FIIs focusing on Indian Non-Ferrous Industry - we feel there is no better Stock in this Sector although it is PSU Stock.

- TATA MOTORS : It closed today at Rs. 534. It tested a new 52 week high of Rs. 570 during the month. Book profits or exit at Rs. 600+ in the medium term. This Stock is FIIs darling !

- RELIANCE : It closed today at Rs. 586. We hope investors booked profits at Rs. 600+. Exit from this Stock at Rs. 600+ levels.

We recommend fresh investments in MRPL and NALCO for investors who do not hold these two stocks and wish to invest in the Indian Equities. Please remember we recommend Stocks with long term perspective and outlook. Returns have been handsome for investors who have held on to our recommended stocks over the long term.

FEBRUARY
The reference date for Jan'04 closing is taken as 3rd Feb'04 as we were waiting for some clear trend to emerge for the BSE SENSEX. We are late by a couple of days.

BSE SENSEX closed today ( 3rd Feb'04 ) at 5621 lower 6.7% than Dec'03 closing of 6027. On 9th Jan'04 history was created once again at the BSE. The SENSEX touched an all time high of 6250 on 9th Jan'04 although it closed much lower for the day at 6120. BSE SENSEX had intra month high of 6250 and a whopping low of 5550. SENSEX was like a yo-yo for a few days and was 'Day Jobbers' nightmare. Too much volatility is not a good sign for the Markets.

BSE SENSEX was so volatile that it breached pass our predicted R1 at 6150 and crashed below our S4 level of 5750 during the month of Jan'04. As predicted BSE SENSEX gave a very sharp reaction after testing/breaching 6150 levels.

FIIs were nett buyers of Indian Equities again in the month of Jan'04. The Indian Economy may grow at around 7 % per annum in the coming year as per most of the leading economists and as per Survey of GoI.

The General Elections have been pre-poned by the current coalition Government in India. The General Elections will be held sometime in April'04 instead of Nov'04. This important development will also have an impact on the Indian Stock Markets in May'04 when the new Government is in place in New Delhi. A stable Government will propel the BSE SENSEX past 6500 levels or even 6800 levels in May'04. Failing which one could see BSE SENSEX at 4500 levels in case there is an Un-Stable Government after the General Elections.

We feel that BSE SENSEX will be range bound for the month of Feb'04 as estimated by some leading stock market pundits - between 5600 to 6000 levels. But we feel that BSE SENSEX may test a very crucial level of 5450 in Feb'04. A very good level for punters or traders to enter for short term gains !

For the month of Feb'04 the levels to watch are :

R1 5780 R2 5860 R3 5940 R4 6150
S1 5600 S2 5550 S3 5450

No investment is recommended for the time being in the Indian Equities. Small Investors are advised to stay away from the Equity Market as volatility would hurt.

A brief synopsis of a few our favorite and/or recommended Stocks.

- LARSEN : This engineering giant closed today at Rs. 502. It tested a new 52 week high of Rs. 602 during the month as predicted. We hope investors booked profits at Rs. 600+.

- MRPL : This Refinery Stock now under the ONGC umbrella closed today at Rs. 52. It tested a new new 52 week high of Rs. 69 during the month. This Refinery Stock will soon be under the ONGC Umbrella completely. ONGC wishes to pick up HPCL's 16.9 % equity in MRPL at Rs. 37.50 per Share. This awaits GoI's approval, which now would be when the new Govt. is in place after the General Elections.We repeat MRPL is our Stock for 2004. We stick to our prediction of Rs. 200+ in calendar 2004.

- TISCO : It closed today at Rs. 386. It tested a new 52 week high of Rs. 466 during the month. In fact this is a eleven year high for this Steel Major. We hope investors booked profits at - Rs. 450+ levels. Target price - Rs. 600, as revised in Dec'03 forecast.

- ONGC : It closed substantially lower today at Rs. 692. It tested a new 52 week high of Rs. 995 during the month. Subsidy on LPG and Kerosene has hit the quarterly results of this Oil and Gas Giant. Only a temporary blip ! Ultimately GoI will pay ONGC the subsidy amount and in any case over the next year or so we expect subsidy on LPG to be near zero. On Kerosene the subsidy may take another two years. On the positive side we expect Natural Gas(NG) prices to be completely
'De-Controlled' in the next one year.Just watch ONGC touch Rs.1500+ levels or more in the next nine months after the said de-control. Stock Markets discount the future ! If Crude stays firm the way it is - ONGC may even cross Rs. 1800 levels in the medium term as this is a bonus post de-control of NG Prices.

We had predicted in Dec'03 that Crude Oil could test US $ 40 pbbl levels in the near future. On 5th Jan'04 Crude tested
US $ 33.95 in NY. GOLD tested US $ 428.50 pto at LME on the same day. A fifteen year high since 1988. PLATINUM tested US $ 850 on the LME. A level not seen since 1980 - a 24 year high.

- NALCO : This PSU Aluminium major closed today at whopping low of Rs. 146. It tested a new 52 week high of Rs. 206 during the month. Book partial profits at Rs. 250+. Balance stay invested. It is a Rs. 450+ Stock.

- TATA MOTORS : It closed today at Rs. 512. It tested a new 52 week high of Rs. 540 during the month. Book profits or exit at Rs. 600+ in the medium term.

- RELIANCE : It closed today at Rs. 556. It tested a new 52 week high of Rs. 603 as predicted. We hope investors booked profits at Rs. 600+.

The Indian Stock Markets will be range bound for Feb'04.

JANUARY

The reference date for Dec'03 closing is taken as today - i.e. 2nd Jan'04 as this is the weekly closing at BSE.

BSE SENSEX created history of all sorts by closing today ( 2nd Jan'04 ) at it's highest ever level at 6027. On 14th Feb'2000 the BSE SENSEX had tested an intra day high of 6150 but closed on 2/14/200 at 5924. Today is a Golden Day in Indian Stock Markets as for the first time the BSE SENSEX closed above the magical figure of 6000.

Please refer to our Special Mid-Oct'03 Update for the Indian Stock Markets. We had predicted that BSE SENSEX was for sure heading towards that magical figure of 6150 !

The BSE SENSEX closed today at 6027 up a whopping 17 % from the 1st Dec'03 level of 5161. The BSE SENSEX was far far bullish than our predictions for the month of Dec'03. We had predicted a level of 5450 for the month of Dec'03.

FIIs were heavy buyers of Indian Equities in the month of Dec'03. This was on the back of some encouraging figures that Indian GDP grew by 8.2 % in Q2 of 2003-04 as compared to 5.2 % QoQ for 2002-03 fiscal. The two primary reasons were Bumper Monsoon Rains in India this Summer. This fuels rural demand of FMCG Products and Consumer Durables in India. Secondly there was a substantial growth in the Services Sector in the Indian Economy.

Shares of Automobiles, Auto Ancillaries, Banks, Cement, Steel, Power, FMCG and Pharma were in good demand on the Indian Stock Markets in Dec'03. FII hot money chasing a few quality Stocks in the Indian Stock Markets ! Some penny and worthless stocks rise in such bull rallies. Investors should be very careful to stay away from such stocks.

The Indian Economy may grow in excess of 6.2 % this fiscal. All most all Stock Market Pundits are saying that BSE SENSEX will be around 6500 to 6800 levels by June'04. We feel that BSE SENSEX will be far far ahead of 6800 levels by June - Sept'04. We will update in the due course of time.

For the month of Jan'04 the levels to watch are :
R1 6150
S1 6000 S2 5920 S3 5840 S4 5750

We are not recommending any new shares at these 6000+ levels of BSE SENSEX. Investors to book profits all levels of BSE SENSEX above 6150 levels. We feel the BSE SENSEX will give a sharp reaction after testing 6150 levels.

A brief synopsis of a few our favorite and/or recommended Stocks.

- LARSEN : This engineering giant closed today at Rs. 537- a new 52 week high. The Stock has performed better than our expectations. We are revising the price target of this Blue Chip to
Rs. 600+. After De-merger of it's Cement Business, the company is planning to sell it's 'non-core' engineering businesses i.e. glass containers, metal packaging etc. Book profits at around Rs 600.

- MRPL : This Refinery Stock now under the ONGC umbrella closed today at Rs. 54 - a new 52 week high. We repeat MRPL is our Stock for 2004. We stick to our prediction of Rs. 200+ in calendar 2004.

- TISCO : It closed today at Rs. 457 - a new 52 week high. Investors to book partial profits at these - Rs. 450+ levels. Target price - Rs. 600, as revised in Dec'03 forecast.

- ONGC : It closed toady at Rs. 943 - a new 52 week high. Our prediction that ONGC is a Rs. 900 Stock has hit a bull's eye !
ONGC has been our favourite stock for the past 15 months or so.

The GoI has decided to sell 10 % equity of ONGC in the Indian Market through an IPO Route to raise about US $2.76 Billion. The Disinvestment and Strategic Sale of Equity in PSUs - HPCL, NALCO etc. had hit a serious roadblock with GoI. The GoI has a target to raise cash to the tune of US $ 3.0 Billion by end of this fiscal year i.e. by 31st March'04. The Disinvestment and Privatization Programme of GoI had to be stalled for various reasons. The GoI is cash strapped and has a burgeoning fiscal deficit - in excess of 10% of it's annual GDP. In one stroke GoI decided to sell 10 % equity of ONGC and GAIL - another smaller profitable PSU to raise this money and bridge the ficsal deficit as per it's Annual Plan. We salute the Disinvestment Minister - GoI, for his bold initiative. We also congratulate the GoI for this momentous decision.

This decision of GoI led to fresh demand of both the Stocks - ONGC and GAIL.GoI has targeted to raise US $ 220 Million from the sale of 10 % of GAIL's Equity.

Based on the above news of a forthcoming IPO this fiscal for ONGC and the fact that we predict a bullish BSE SENSEX in the coming six to nine months - we are revising our target price for ONGC upwards from Rs.1200 for March'04. We predict a price of Rs.1500 to 1800 for ONGC by March'04. This could be a Rs. 2500 Stock by June-Sept'04 if Crude Oil prices do not come below US $ 30 pbbl.

We have predicted in Dec'03 that Crude Oil could test US $ 40 pbbl levels in the near future. We stick to our predictions. Hence ONGC to be a Rs. 2500 Stock can be a reality as far we are concerned !

GOLD tested US $ 415.50 pto in Asia on 29th Dec'03 - highest figure since Feb'96. We stick to our predictions of GOLD testing US $ 450+ pto in the near future.

- NALCO : This PSU Aluminium major closed today at a new 52 week high of Rs. 203. Book partial profits at Rs. 250+. If and when the GoI decides to privatize this PSU - This stock could be Rs. 450+. It all depends on the next Government at the seat of power in Delhi in June'04 or Dec'04. General Elections are due in Nov'04 but could be pre-poned and held in May'04. Then the new Government will be in place by end June'04.

- TATA MOTORS : It closed today at a new 52 week high of
Rs. 461. Target price Rs. 600+ in the medium term.

- RELIANCE : It closed today at Rs. 590 - a new 52 week high. This Stock has also performed better than our expectations. Book profits at Rs. 600+.

The BSE SENSEX has performed much better than the other Indices in the Asian Economies in the past 12 months in 2003. BSE SENSEX was up by 73 % as compared to HANG SENG - Up 34 %, Singapore's STRAIT TIMES - Up 29%, KOSPI - Up 29% and TAIWAN's - Up 32 %. NIKKEI 225 was also up smartly.

The FOREX Reserves of GoI are close to US 100 Billion. This is a welcome news. Fiscal Deficit is being addressed to by the GoI. The only other major problem which needs to fixed on the Macro Level in the Indian Economy is the level of - Domestic Debt. The new Finance Minister will address this too in his unconventional style ! We sincerely hope this will happen soon.

Cheers to the Indian Economy and to the BSE SENSEX !

The information above is provided by the source indicated and presented by the Astrologers Fund Inc. Neither the Astrologers Fund Inc. nor the source guarantee that the information supplied is accurate, complete or timely, or make any warranties with regard to the results obtained from its use. The Astrologers Fund does not guarantee the suitability or potential value of any particular investment or information source. Remember always to check with your licensed financial planner or broker before acting. This is just the starting point of your research and you must carefully investigate before you buy/or sell.