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RBI’s monetary policy review holds key

Sunday, July 29, 2007

With most of the frontline companies having already declared their Q1 June 2007 results, the market will closely watch the monetary policy review of RBI due on Tuesday, 31 July 2007. RBI is likely to keep rates steady. However, it remains to be seen whether the central bank will raise cash reserve ratio (CRR) to suck out excess liquidity in the banking system.

The 30-share BSE Sensex lost 330.98 points or 2.13% to 15,234.57 in the week ended 27 July 2007, on profit booking. The S&P CNX Nifty lost 120.85 points or 2.6% to 4,445.20 in the week. Prior to this, the market had been posting weekly gains since the past six weeks.

Latest Data released on Friday, 27 July 2007, showed India's wholesale price index rose 4.41% in the 12 months to 14 July 2007, higher than the previous week's 4.27% due to increase in food prices. The inflation is within the central bank's medium-term target of 4-4.5% and annual target of 5% for this fiscal. The Finance Minister, P Chidambaram, hinted recently that high crude oil and food prices did not necessary mean that money policy would be tightened further.

Among the frontline companies - Bharat Heavy Electricals, Bharat Electronics, Mahindra & Mahindra, Cairn India and i-flex Solutions, will declare their June 2007 quarter results in the coming week

Gujarat Mineral Development Corporation, India Cements, Balkrishna Industries, Bharati Shipyard, Dredging Corporation of India, Gitanjali Gems, India Infoline, Indiabulls Real Estate, Nagarjuna Construction Company, Wanbury, Asian Electronics, Development Credit Bank, Ashapura Minechem, Parsvnath Developers, Birla Corporation, Financial Technologies (India), Provogue (India), Madhucon Projects, Sterling Biotech and United Phosphorous, will also declare their result

Oil prices have held firm above $75 a barrel on fears of tight summer supplies would offset a fresh wave of risk aversion that struck US equities and dragged oil down a day ago. Any sharp rise from these levels, may dampen the sentiment

Posted by FR at 7:10 PM  

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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.