Okay, buckle up for anther rough and tough session. There is no real mystery in what the RBI could do; a 25-bps rate hike by the RBI has been priced in. What the RBI says will be important. In short, stay calm and avoid undue risk taking. With apologies to Buffett, we can’t really be greedy now when others are fearful.
The RBI has been waging a war against inflation but its year-long efforts don’t seem to be having the desired impact. On the other hand, there has been some moderation in the economy. Having said that, the advance tax numbers and credit offtake are belying fears of a slowdown. The less said the better about the UPA II’s governance.
The start will be gap-down due to steep losses as Greek debt woes continue to hound world markets. So, risk is being taken off the table. The dollar is up due to safe haven buying. The euro is under pressure as concerns over Greek finances mount and after Moody’s issued a warning on French banks.
US slowdown is adding to the gloomy mood. There is also some anxiety over China. One positive for India today is that crude has corrected.
