Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARD :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: list of goods taxed at 4% :: cpt :: form 3cd :: due date for vat payment :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: TDS :: VAT Audit
« Markets »
 Why we must tweak the market-led model
 PE transactions prompt income tax queries over round tripping concerns
 Amended India-Mauritius tax treaty only covers investments in shares
 Government drops cap gains tax on startup shares held for 2 years
 Tax-free bonds regain demand in the secondary market
 Relevant Market’ Under Competition Act, 2002
 Indian markets best in terms of earnings momentum, price revision
 How India will become a common market with GST
 Broader markets outperform; Nifty holds 8,500
 Have Indian markets run ahead of fundamentals?
 Sebi mulls allowing foreign VCs in infra investment firms

Market participants: More rise in rates possible, range-bound movement likely
September, 17th 2011

Market participants have not ruled out a further rate rise by the Reserve Bank of India (RBI), with the movement in coming sessions tracking factors abroad.

Domestic equity markets, which opened on Friday in anticipation of a pause signal in rate rises, pared gains at the closing as the central bank made it clear there was no change in its hawkish stance on high inflation.

Though the rise of 25 basis points (bps) in the repo rate was in line with markets expectation and was already factored in, RBI left experts wondering whether the rate cycle had peaked or not. The Bombay Stock Exchanges benchmark, the Sensex, rallied 1.45 per cent in a volatile session before settling at 16,889.58, up 0.3 per cent.

Motilal Oswal, chairman and managing director of Motilal Oswal Financial Services, said, While the 25-basis point increase was already factored in, successive rate hikes are going to hurt growth. Market participants are cautious and will take cues from overseas markets. He said RBIs anti-inflationary stance meant the rate rise cycle was not over. There may be one more hike after this, he said.

Fridays rise marked the 12th increase since March 2010. The central bank kept its options open, saying it would be guided purely by the direction of inflation in the coming months.

This does not rule out the possibility of another 25-bps hike, since food inflation is unlikely to fall in the coming months, amid the rise in petrol prices, said Amar Ambani, head of research at India Infoline.

Participants believe after the recent bounceback, the markets would become range-bound. We see markets broadly peaking out the current rally at close to 5,250 Nifty levels and remaining in the range of 4,750 to 5,300 for some more time, said Amisha Vora, joint managing director at Prabhudas Lilladher.

Experts say RBI concedes the likely impact of tightening would mean moderating growth, but would not relent till it sees it reflecting in sobering inflation numbers. Then, bond markets are also likely to be range-bound.

Navneet Munot, chief investment officer at SBI Mutual Fund, said, We expect the bond market to remain range-bound, with a downward bias in yields, over the next couple of months. Sentiments in equity markets should improve on evident signs of peaking of the rate cycle. The markets would closely watch global developments and movement in commodity prices.

According to Ambani, while we would be comfortable with rates staying at elevated levels till the first half of 2013, which is likely, we wouldnt be at ease if more rises in rates follow. Further hikes will impact growth severely. Already, the IIP data has been poor, export momentum is unlikely to continue, credit growth is decelerating and liquidity is getting tighter, he added.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions