Home | Register | Sign in | Contact Us | Sitemap |
   
11 Sep 2011 09:42 AM
Market Commentary - 12 September 2011 – Status quo expected! 
Swapnil Suvarna
 

A series of domestic economic data is keenly awaited this week based on which RBI will decide its stance on interest rate which will set the tone of the market trend 

Last week, the Indian markets ended flat with the Sensex and Nifty closing at 16,867 and 5,059 respectively gaining merely 46 and 19 points each.

The week started off on negative note on fresh worries over the global slowdown after dismal US jobs data and slowdown in India’s services sector growth for August 2011 was reported. However, the negativity was short-lived led by a series of positive news. The Moody’s Investors Services affirmed BAA3 rating for India's foreign currency government debt and its BA1 rating for local currency debt. Also to help investors shield their investments from mark-to-market volatility, RBI is looking to re-launch inflation-indexed bonds (floating rate bonds linked to the inflation rate).

Moreover, the annual food inflation fell to 9.55% in the week ended 27 August 2011, from 10.05% in the previous week while the fuel inflation was at 12.55%. This made the market gain further momentum. Following the release of inflation data, RBI said that a change in anti-inflationary monetary stance will be motivated by signs of a sustainable downturn in inflation.

However, on Friday, 9 September the domestic markets pared its three day gain after US Federal Reserve chairman Ben Bernanke gave no signal on fresh stimulus for the economy in his much awaited speech. Also, India’s exports slowed sharply as it grew 44.2% in August 2011 from a year earlier, totaling $24.3 billion. This news too weighed negatively on the investor stance.

In addition, RBI governor Subbarao raised concerns on excess supply of gilts in the secondary market. To resolve this concern the governor said banks need to set aside minimum mandatory amount of deposits to invest in government bonds.

Week Ahead

We expect the domestic markets, to continue its staggered trend as data on industrial production for July 2011 and headline inflation for August 2011 is expected this week. This data will provide a clear picture of RBI’s stance on interest rate at its mid-quarter monetary policy review on 16 September 2011.

As always, we suggest your investors to invest in good quality equity schemes to moderate the impact of market volatility.

 
|
|
|
|
|
|
|
Cafemutual welcomes your comments. Any disagreements or criticisms must be expressed in a dignified manner. Thank you.
blog comments powered by Disqus
 
Related Articles
As markets gain, investors continue to cash out of equity funds
SBI MF to empanel SBI's retired employees under the new cadre of distributors
Registering SIP to get easier and faster
US funds in vogue
Federation of Mutual Funds Distributors Association of India expected to be functional in June
Gold ETF trading picks up on bourses during Akshaya Tritiya
Now, insure financial goals with general insurance cover
SBI MF launches ‘Gold Accumulation Facility’
NFOs now open May 21
Deutsche MF introduces DWS Fixed Maturity Plan - Series 16 (DFMP - 16)
Religare MF introduces Religare Fixed Maturity Plan - Series XV - Plan F (369 days)
ICICI Prudential MF introduces ICICI Prudential Fixed Maturity Plan-Series 64-3 Year Plan K
Taurus MF introduces Taurus Fixed Maturity Plan Series V (370 Days)
Deutsche MF introduces DWS Hybrid Fixed Term Fund - Series 9
HDFC MF introduces HDFC FMP 371D September 2012 (1)
Deutsche MF introduces DWS Hybrid Fixed Term Fund - Series 9
 
About Us | Media | Advertise With Us | Editorial Policy | Contact Us | Privacy Policy | Disclaimer | Sitemap
© Cafemutal.com. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of cafemutual.com is prohibited.
Best Viewed in I.E 7.0 and above. Resolution: 1024 * 768. Developed & Hosted by Accord Fintech Pvt. Ltd