Pause-itive at start!

"Honest differences of views and honest debate are not disunity. They are the vital process of policy making among free men." -Herbert Hoover.

Global stocks have extended their rally, fueled by coordinated central bank action to ease credit conditions in the fiscally strained Europe. The liquidity boosting measure was led by the ECB in close cooperation with the Fed, BOJ, BOE and the Swiss central bank.



US stocks rose for a fourth consecutive day. European indices surged 2-4%. Banks were the top winners. Asian equities are up as well. So, it’s a no-brainer that Indian market will also head north at start.

The very important RBI policy meeting outcome could sway the mood in the markets. Opinion is very divided on what the RBI could do. Some expect a pause but bets remain on a 25 bps hike as inflation refuses to budge. RBI policymakers will have to consider the dismal IIP data and the petrol price hike. The RBI policy statement will be closely analysed for hints on its future stance.

ONGC will be in focus amid reports that its FPO could be deferred. EGoM will meet to consider a cap on LPG cylinders. But, the Centre is reportedly facing opposition from a couple of allies.

The Government has allowed local companies to borrow up to $1bn in the Chinese currency within the $30bn ceiling on foreign borrowings for this fiscal year. There is no specific ceiling on individual companies for borrowing in the Renminbi. However, the proposal has to be approved by Reserve Bank of India (RBI).

The ECB panel, comprising finance ministry and RBI officials, also decided to raise the limit on overseas borrowings of more than five years maturity under the automatic route to $750mn from $500mn for individual firms. But it decided against raising the ECB cap of $30bn for this fiscal immediately.

HDIL's proposal to classify its Mumbai slum rehabilitation project as an urban infrastructure for the purpose of overseas borrowings was dismissed by the committee.

The Cabinet meanwhile has cleared the proposal for infusion of Rs 185bn in the Delhi Mumbai Industrial Corridor Development Corporation. However, the Cabinet deferred a decision on the national manufacturing policy.

FIIs were net buyers of Rs 1.36bn in the cash segment on Thursday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were also net buyers at Rs 44mn on the same day.

FIIs were net buyers of Rs 1.23bn (provisional) in the F&O segment.

The foreign funds were net sellers at Rs 92mn in the cash segment on Wednesday, as per SEBI data. The mutual funds were net sellers of Rs 1.57bn on the same day.

Global Data Watch: EU trade balance and current account data and US consumer sentiment report.