Straight from the Specialists
A positive week for the markets saw volatility in a narrow band with Nifty gaining about 115 points to close at 5216, a gain of about 2.25 pct. The midcaps and small caps outperformed the frontline stocks indicating retail interest.
FIIs continued with their buying spree lapping up about US$ 535 million worth of stocks. The new finance minister Palaniappan Chidambaram was given a thumbs up but expectations of any radical move are low especially after the disappointment from Prime Minister Manmohan Singh in the last fortnight.
The Reserve Bank of India left the CRR and repo rates unchanged but reduced the SLR by 100 bps. The India Meteorological Department (IMD) hinted at a “drought-like” situation as drought can be defined only after the season ends. It is expected that rainfall across the country in August and September will be below normal. This too was taken in the stride by the markets as this situation was building up for a while.
As the industrial sector was coming to terms with the Manesar violence, which questioned India’s image of offering a business friendly environment, we had the worst power failure in post-independent India with the northern grid collapsing. It wasn’t limited to Monday and we saw a repeat on Tuesday, exposing the shoddy state of India’s infrastructure. Our industrial sector seems to be having a bad concoction of a non-performing government, labour uprising in the industrial environment and a failing infrastructure but we still grin and bear it.