After a bad May the Indian market seems to be witnessing a relief rally. GDP data has fanned speculation that the RBI may not be too aggressive when it meets on June 16. The deceleration in investments is a cause for concern even as private demand remains healthy. Inflation could stay elevated on account of firm global commodities. An impending hike in diesel will exacerbate the problem. So, expect the RBI to jack up policy rates even further.
The Centre needs to chip in by pushing key reforms, boosting constructive spending and cutting wasteful subsidies. Policy flip-flops should be avoided to lift FDI. Monsoon session of parliament will be important as will the upcoming EGoM on fuel prices on next week.
Asian stocks are a little edgy amid worries about slowing manufacturing growth in China. Australia's economy contracted 1.2% in Q1.
Auto and cement sales will be in focus today so will be the manufacturing PMI and the trade data. Crude is back above $100 a barrel as the dollar has softened a tad.
