The ‘bailout’ package has been accepted by the congress and house of representative may formally clear it today or tommorrow. It has many new provisions with single most important one being the gurantee for bank deposts upto 250000 dollar against 100000 dollars . It is a very good thing to do for return of confidence in banking system but basic work for really ensuring it will have to be done in all earnestness and speed. There has been a luke warm response so far to the developments in terms of gain in indices in Asia and Eeuropean markets so far in the day.
I had voiced concern about Indian authorities keeping at a time when they should communicate with public and luckily they are now doing so. The PM said that he does not expect the India remain unaffected by the cross currents of economic flows. I am surprised that why he does not find a solution towards the problem of high interest being paid by creditcard holders and other lonees. The banks are happily increasing the family of such people who are likely to become their bonded laboubrers after some time. There would than be defaults and there would bank failieures for after farmers,these people and than the industry business people and the house mortgage-wallahs would out of necessity or by design come in to default. We may harshly blame the people running the failing banks in USA but the slide in property price was rather too sharp and too soon and therefore boomranged. Had it been after some years later or slowly , these very people would have been praised for they did for there depositors and shareholders. We are not too much in US like position but we definitely are in a similar position. The trigger may in a different way or differing intensity. Should a PM acknowldging it not be acting in good time capping the interest rates chargeable. If interest rates are capped banks would themselves be more choosy and not rope in any soul in body in their marketing enthusiasm.
Indian exports went up 27 p.c. And imports by 51 p.c. Leaving a deficit of 14 Bn dollars for the August month.The auto sales numbers have been reasonable good and speak volumes for our economy being in health at least if not pink of it.
For the record please not a few rates:
Steel Ingot(GZB/NCDEX)Rs 30510/ton.
Sugar (DLH/NCDEX) 1850/qtl
Call Rate 14 pc
10 Gilt yield 8.46 pc
Note Some Ratios:
Nifty(3950) 16.66 PE
Nifty PCR 0.92
T/O at NSE 48K Crs (F and O)
T/O at NSE 11K Crs.(Cash)
Every thing seems to be in its normal state even when the biggest ever drama is being played out in financial arena. This equilibrium may be deceptive. The sudden moves may be in any direction. I hope in India it is more likely to have upward thurst. I say this because there have too much preaching about remaining out of stock market crossfire and too much discouragement has been directed at listeners by the channels particularly . Our behemoth insurer LIC has shown profits of over 10 pc during last year. Our herd like behaviour as investors may in fact leave the safe point well behind in the next surge.
Let’s watch with fingers crossed for the night.