Steady start after a nasty surprise

The size of your success is measured by the strength of your desire; the size of your dream; and how you handle disappointment along the way. - Robert Kiyosaki. The RBI continues to surprise, this time, rather nastily with even the CRR left unchanged. Nasty surprises can be used to shake people out of a complacent state but the power’s that be have to wake up from their slumber. Future action from the RBI will hinge on the Centre taking concrete steps towards fiscal consolidation. Further worsening of the eurozone debt crisis is another scenario which could force the RBI’s hands. Markets are perhaps more upset with the RBI than Fitch, which has become the second of the top three ratings firms to cut outlook on India. Despite their sullied reputation post 2008 crisis, one can’t afford to overlook the concerns flagged by Fitch and S&P. Lack of fiscal discipline is costing India dearly. The Government’s ostrich-like attitude on this crucial issue may deepen India’s woes. One hopes the Centre will soon unveil a few important initiatives to shore up the economy. The opening is likely to be steady today owing to mixed global cues. All eyes are on the FOMC meeting to see if the Fed announces fresh monetary easing. Not much is expected out of the G-20 summit, except the usual rhetoric. Trend in FII flows: The FIIs were net buyers of Rs 4.12bn in the cash segment on Monday while the domestic institutional investors (DIIs) were net sellers of Rs 633.6mn, as per the provisional figures released by the NSE. The FIIs were net buyers of Rs 1.68bn in the F&O segment on Monday, according to the provisional NSE data. The foreign funds were net buyers of Rs 3.92bn in the cash segment on Friday, according to the SEBI figures. Global Data Watch today: G20 Meeting, Australia RBA Meeting’s Minutes, Japan Leading Economic Index (Apr), UK Nationwide Consumer Confidence (May), UK Consumer Price Index (May), UK DCLG House Price Index (Apr), UK Retail Price Index (May), EU Construction Output (Apr), Germany ZEW Survey, EU ZEW Survey, US Housing Starts (May) and US Building Permits (May).