The world’s markets have shown encouraging signs and our Nity has rebounded with gain of 84 points to closed at 5139 while Sensex closed with gain of 270 to close at 16949 . Again we get an endorsement that the world’s other markets are influencing the local market and the inflation figure of 7.55% growth in May hasn’t had an effect.
The credit policy may bring some positive surprises as all are not sure of big relief in interest rates. However the CRR cut of 100 BPS would see banks going up in a decisive manner. Also the liquidity will partly get in to markets and keep them edged up. If this measure is along with 50 BPS Repo rate adjustment also then I think possibly the previous highs of 52W or even the all time may be broken . This is due to the fact that interest cut along with crude oil going down will ensure corporate profits for 12-13 growing by 20 to 25% and this will have to reflect in stock prices.
The political drama about the Presidential election is going on. Pranab Da is the choice of UPA but more interesting thing for the market will be to know who replaces him as the Finance Minister. Fingers have to be kept crossed for the Erozone related developments so its tricky time to take a firm decision on many accounts.