(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Reuters)

(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Reuters)

The rally in the Indian stock markets, fuelled by the so-called reform announcements, seems to have fizzled out. Frontline indexes have retraced more than 60 percent of the gains made since Sep. 13, 2012, the day the reform measures were made public.

(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Reuters)

Indian stock markets have hardly gone anywhere since June, with the Nifty hovering in the 8-9 pct range. But the coming months may see a breakout of this range as volatility, as measured by the India VIX index, seems to be rebounding from four-year lows, after having fallen for three months in a row. A short-term break, out of the range, on the downside seems more probable.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

At its mid-quarter monetary policy review on June 18, the Reserve Bank of India (RBI) kept its rates unchanged despite expectations of a cut. To further augment liquidity and encourage banks to increase credit flow to the export sector, the RBI has increased the limit of export credit refinance from 15 percent of outstanding export credit of banks to 50 percent, which will potentially release additional liquidity of over 300 billion rupees, equivalent to about 50 basis points reduction in the CRR.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The last time the Reserve Bank of India (RBI) surprised the markets was when it announced a 75 bps cut in cash reserve ration (CRR) days before its mid-quarter review of monetary policy on March 15. It did so again in its annual monetary policy meeting on April 17, with a 50 bps repo rate cut when the markets were either expecting no rate cut or a 25 bps rate cut at best.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

Like every budget since the subprime crisis of 2008, the one on March 16 will see the Finance Minister walking a tightrope between fiscal consolidation and growth. The only difference being — this time the government is really constrained to provide a fiscal boost to consumption.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

As they say, it is always darkest before the dawn. Equity markets seem to be the finest proponents of this axiom. They have a habit of surprising investors. What we have seen so far in 2012 sums it up pretty well.

(The views expressed in this column are the author’s own and do not represent those of Reuters)

What a year 2011 has been. Except certain commodities such as gold and oil, every other asset class has been hit. With Sensex down more than 20 pct YTD, 10 year g-sec yields up by almost 1 pct and rupee down by almost 14 pct against the dollar, it has been a poor year for investors. This was caused by a bout of strong global risk aversion led by the European sovereign debt crisis, high inflation in emerging markets and consequent monetary tightening, and lack of proper policy action in India. The only salvation came from commodities such as oil (up almost 26 pct in rupee terms) and gold (up almost 38 pct in rupee terms).

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The BSE Sensex romance with the 16,000 level seems to have been rekindled, with the Sensex closing below it on August 26, after a gap of more than 18 months during which it touched a high of 21,109 (missing the all-time high of 21,207 by a whisker).

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The job of a central bank is not enviable, at least not in a growth-obsessed economy like India. When it does not get hawkish enough, it gets termed as being “behind the curve”, and when it does get hawkish, we implore it to stop for fear of hurting growth.