The RBI has done what it was expected to do. No surprises in the RBI statement either, with the central bank maintaining its anti-inflation stance. Positive takeaways include no major economic slowdown seen though RBI remains worried about the global backdrop. Given that domestic fuel prices have not been fully adjusted to the global reality, inflation is likely to stay high for some time to come. That means more small doses of tightening from the RBI in the coming months.
A big problem for India is that the Government machinery seems to have gone into deep slumber. UPA II needs to get cracking on the policy front to shore up investor sentiment and consumer confidence.
The start is expected to be flat-to-sideways amid mixed and indecisive offshore cues. US blue chip stocks managed slender gains while technology shares slipped. European markets ended in the red. Asian indices are struggling for direction.
Some recovery is likely after two days of losses but one must be cautious as FIIs don’t appear to be gung-ho on India at the moment. Stick to stock specific approach.
