Finding remedies

Science may have found a cure for most evils, but it has found no remedy for the worst of them all-the apathy of human beings. - Helen Keller. Finance Minister P. Chidambaram has promised corrective and remedial measures to revive confidence in the sputtering Indian economy. High on the FM’s agenda are fiscal discipline and clarity on controversial tax proposals. Does that mean hike in ‘regulated’ fuel prices? Does it mean dilution of GAAR and amicable settlement with Vodafone? There is a wide difference between rhetoric and action. Therefore, one will have to wait and see what FM & Co. can deliver in the coming weeks. Bear in mind that some of the Centre’s proposals have met with stiff political resistance. The opening is likely to be mildly positive. Asian markets are mostly up this morning after US stocks closed at a three-month high. European shares ended at their highest level in more than four months. Global risk tolerance has improved lately amid optimism that central banks will step in to support respective domestic economies. The ongoing upswing may persist for a while but is likely to run out of steam sooner or later. Adopt a slightly cautious attitude. The Nifty needs to cement its position above 5240 for at least three trading sessions in order to sustain the current upmove. Germany has reportedly backed a European Central Bank (ECB) bond-buying plan that may ease the region’s debt crisis. The ECB has laid out a plan that could see it intervene to help bring down borrowing costs for countries such as Spain and Italy, but only after they request help from the region’s rescue funds. Borrowing costs fell sharply in Europe on Monday, with the yield on Spain’s two-year government bond falling 0.49% to 3.02%. Expectations of more stimulus from the Federal Reserve has also supported global equity markets of late. Many investors are betting that Fed chairman Ben S. Bernanke will lay the groundwork for further monetary action in a speech at the central bank’s annual conference in Jackson Hole, Wyo., at the end of the month. US treasuries snapped a two-day decline after Bernanke said that indicators of strength in the US economy may fail to measure the struggles faced by individuals. His comments yesterday bolstered speculation that the Fed will increase its bond purchases to support the US economy. The yen has advanced before a Bank of Japan (BOJ) policy meeting that starts tomorrow. Key Results Today: Allcargo Logistics, Aurobindo Pharma, Balrampur Chini Mills, Bombay Dyeing, Chettinad Cement, DFL Infrastructure Finance Limited, Great Offshore, Hind Rectifiers, J&K Bank, NHPC, Nitesh Estates, Panacea Biotec, Punj Lloyd, Sobha Developers, Tata Chemicals, United Breweries. Trend in FII flows: The FIIs were net buyers of Rs 5.55bn in the cash segment on Monday while the domestic institutional investors (DIIs) were net sellers of Rs 42.3mn, as per the provisional figures released by the NSE. The FIIs were net buyers of Rs 10.18bn in the F&O segment on Monday, according to the provisional NSE data. Global Data Watch today: Australia RBA Interest Rate Decision, China Foreign Exchange Reserves (Jul), UK Industrial Production (Jun), UK Manufacturing Production (Jun), German 10-year Bond Auction, Italy GDP (Q2), German Factory Orders (Jun), UK NIESR GDP Estimate (Jul), US Consumer Credit Change (Jun).