Strong Q2 GDP growth has sparked hopes of India hitting the 9% mark for FY11. The fiscal deficit seems to be under control too. The core sector growth improved smartly as well in October. Now we will have to wait for the IIP report and monthly inflation data.
It would be interesting to watch the RBI’s reaction to the upbeat macro-economic statistics. The mid-quarter review is scheduled for Dec. 16 while the quarterly review is slated for Jan. 25. It could increase rates by 50-75 bps next year.
The start today is likely to be a subdued one given the murky global outlook. However, there is a chance of a bounce back provided the external picture improves.
US stocks closed in red despite encouraging consumer confidence data. European markets fell amid persistent worries over the sovereign debt situation. The euro slid below the $1.30 mark, while the spread on Spanish and Portuguese debt hit new record highs. China’s manufacturing expanded at the fastest pace in seven months in November. Keep an eye on monthly auto and cement sales, trade data and manufacturing PMI.
