Weekly Newsletter - June 9 2012

It was a pretty good week for equities, as desperate investors snapped up beaten down shares on hope of emergency monetary action. While the Australian and Chinese central banks did cut rates, lack of commitment from the ECB and the Fed left investors dismayed. Another wave of dismal economic reports out of the eurozone coupled with yet another downgrade for Spain failed to influence the investors. However, things did cool down substantially on Friday in the wake of Fed chairman Ben Bernanke’s snub. The Chinese rate cut triggered speculation about Saturday’s data points. Tension also prevails over the precarious fiscal health of Spain and its fragile banks. Greek elections on June 17 will start playing on investors’ minds from next week. The following couple of weeks also has key events lined up, especially the FOMC meet and G-20 summit. For India, next week will be important, as the Government will release the latest IIP and inflation reports. The two data points could well have a bearing on the outcome of the RBI’s June 18 policy meeting.