Weekly Newsletter - Sep 14 2012

Indian markets had a splendid week, with the BSE Sensex and the NSE Nifty scaling seven-month peaks besides crossing important milestones. The much-awaited move on fuel price revision did come about, with the Government finally hiking diesel prices. LPG subsidy has been capped while excise duty on petrol has been slashed. The Government was also due to take a call on a whole host of reform measures to avert BRICS’ first debt downgrade to ‘junk’. All eyes are on the RBI, which reviews its policy on Monday. With inflation in August spiking, the RBI may not yet cut policy rates. Stocks could fly even higher if the RBI too springs a pleasant surprise. Globally too, things have improved considerably, with Europe, China and now the US unleashing fresh stimulus to boost growth. One bad news for India is the fresh uptick in commodity prices, especially that of crude oil and gold. We also need to see what follow-up policy action the Centre unveils in order to restore investor confidence.