NiftyforAll: ALL IS NOT WELL - TIME TO STAY CAUTIOUS

Thursday, September 19, 2013

ALL IS NOT WELL - TIME TO STAY CAUTIOUS

Dear All,

With the US Federal Reserve surprising markets with its decision not to start tapering its quantitative easing programme, analysts and economists are of the opinion that the Indian economy has got the much needed chance to repair its weak macros.

With the fears of a capital flight reduced, analysts feel that the government and Reserve Bank of India (RBI) have got the elbow room to implement strong reforms, in order to curtail the twin deficits.

Now that there is some clarity on the road ahead for the tapering plan, all eyes will now be on RBI Governor, Raghuram Rajan when the Reserve Bank of India (RBI) reviews the Monetary Policy on Friday that will provide a first glimpse on the new governor’s approach to tackling the country's growth-inflation dynamics and external vulnerabilities.

Market expectations range from a partial reversal of liquidity-tightening measures at one extreme to a repo rate hike to contain inflation risks at the other.

However, Bernanke’s commentary highlights the fact that US economy is not yet in a position to grow on its own and will need continued dosages of liquidity infusion. A sharp rise in interest rates and few new job creation is an indication that all is not well despite pumping in over $3.7 trillion dollar in the economy. Growth was largely on account of housing sector, but rising interest rates has started affecting this growth. The money train will continue to run for a few more months.

Perhaps that is all the time RBI governor Raghuram Rajan and Finance Minister Chidamabram have to get their act in place. India’s economy continues on its slow pace, all that the Bernanke has done is assured that he will not pull the rug under our feet.

Lets See what RBI suppose to say and act...?

>>> NIFTY <<<

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If you are a regular follower of my blog, then definitely you won't surprised by the rally today. Since the day 5800 was save kept writing that nifty should bounce on the upper side. Now Nifty facing resistance like 6195 and 6289. Unable to cross 6195 is a clear signal from bear that its ready to strike the market once again. So Caution advised.

>>> BHEL <<<