Narayan Ramchandran of Morgan Stanley said that 50 bps Fed rate cut in early 2008 is very likely. Although, he is surprised by 50 bps cut by the Fed. Fed believes that housing situation is still very serious and they might cut the rates again. He don't think that global slowdown would be too serious. Real bail out was from UK Central Bank.

He further said that valuations are no where next to peak and are not too stretched currently but sees some economic slowdown. There are no problems on earnings or GDP growth in India. He believes that India is one of the best assets in the context of global slowdown. But growth could slow to 7 -7.5% in India. He said that there may see 'Garden Variety' slowdown instead of serious one. He would remain invested in the Indian markets as fundamentals are still strong.

He believes that the US Subprime Issue has been eased and that he will remain invested in the markets. Money will flow from developed markets to emerging markets.

He further said that RBI is expected to pause rather than cut the rates and Asian Central Banks may also turn neutral from hawkish. He believes that rupee effects on stock markets and IT stocks is overdone. The rupee impact may not be as bad as market makes it to be. About Yen, he said that Yen carry trade may not be as 'Alive' as it was 4 months ago.

He is bullish on Telecom and IT sectors and believes that technology companies will continue to show very good RoEs. Most of the long-only investors will gain in the near-term. There is more probability of upside in 1 year and may not see 20% fall in the market. There are higher probability of markets going upside than downside.