Europe and US Market

Europe and the US markets will reopen on 3rd Jan . Oil at 96$ up 41 cents

2007 saw remittances jump 50% chasing equities, real estate - prices, rising interest rate differentials and the rupee A robust capital account swamped the current account deficit, pushing up RBI forex intervention to US$34.8bn last year . Looking ahead to the robust BOP figures released yesterday - our view remains that rupee negatives are mounting - a rising oil import bill, softer exports and rich valuations. RBI's March 2007 anti-inflationary strong -rupee policy appears to have been given up by YVR post the Ben- cut inflows with inflation softening . We expect RBI to continue to limit FDI/ECB's /PN flows going forward - should the " anticipated flows/ fresh allocations for 2008 " rev up - most vulnerable Banks/ Real estate.

FOMC minutes today. The first in the region to report fourth-quarter figures is Singapore clearly indicating growth contraction and a view as to how the U.S. subprime-mortgage crisis and turmoil in global markets will affect Asia's expansion and the " de-coupling theories". South Korea and Taiwan have already warned that easing demand for semiconductors, mobile phones and computers portends weaker growth in 2008.

The yen at 111.71 keeps Asian markets weak- Nikkei closed . Looking to Singapore lower GDP numbers - reality check on Asia from today ?

Sideways trading -southside bias . Selective buildup ahead of Q3 results.