Looks
like the Government has pressed the panic button post the dismal IIP
data. The Finance Minister has indirectly urged the RBI to halt its
tightening. His economic advisor has gone a step ahead by blaming the
series of rate hikes for the economic slowdown. Markets of course are
also hoping for a pause from the RBI. Whether the central bank obliges
is anybody’s guess.
Talking
of macro-economic factors, inflation for August will be out today. It
was at 9.22% in July. The fact that the RBI’s aggressive monetary stance
hasn’t tamed inflation is a cause for concern. It is debatable whether
the RBI has gone too far or not.
The
start is likely to be a positive one due to improved global cues. US
stocks closed higher as did their counterparts across the Atlantic.
Asian markets are mostly up.
We
expect the intraday volatility to prevail amid looming uncertainty over
the RBI policy meet on Friday and global headwinds. The Nifty is likely
to trade in a range between 4700 and 5200 in the near term.
