As
expected, the Indian market largely emerged unscathed a day after
Mumbai was rocked by fresh terrorist strikes. But, the undertone is
still jittery over a spate of local and global headwinds. For the
moment, we expect a sluggish start at best. Asian markets are mixed and
indecisive. US indices ended near day’s low yet again. European equities
too declined.
As
if the concerns on eurozone credit crisis were not enough, the world
now has to contend with back-to-back warnings on US debt situation. The
dollar is down while gold is near record high. Watch out for the outcome
of European banks’ stress test.
Back
home, inflation is most probably in double digits and could rise
further as the full effect of last month’s fuel price revision unfolds.
June data came in a tad lower than estimate but April’s reading was
revised by 1%. So, it’s a given that another 25 bps rate hike is coming
on July 26.
Markets
may have already priced that in though. Nevertheless, rising rates and
high inflation will continue to haunt India Inc. for some time to come.
