Weekly Newsletter - Feb 9 2009

Hopes of some populist tinkering before the Vote on Account (Feb. 16) and expectations of a stimulus package seem to have done the trick for the bulls on Friday. But, the financial and economic turmoil that has ripped all major developed countries continues to rampage emerging economies like India.

Concerns pertaining to liquidity crunch, weak IIP numbers and downgrades in GDP growth have overshadowed positive measures taken by the Government like substantial easing of interest rates and the fiscal stimulus packages.

Poor corporate earnings, deteriorating external trade situation and asset quality in banking sector are some concerns that will exert pressure in the medium term. Next week will bring in the IIP numbers. However, a lot will still hinge on the global market performance where banks and their bailouts would be in focus.