Money Deal

  • Subscribe to our RSS feed.
  • Twitter
  • StumbleUpon
  • Reddit
  • Facebook
  • Digg

Saturday, 21 April 2012

RBI surprises by a Rate Cut of 50 basis points

Posted on 22:18 by Unknown
The markets rallied by about 1.6 pc after the RBI surprised by cutting rates by 50 basis points instead of the widely expected 25 basis points.

1. The corporate results are beginning to pour in. The results of HCL Tech and HDFC Bank are good. Reliance had a poor quarter and about 42 pc of its profits came from investments. It means that Reliance has a lot of cash on its books and doesn't know where to deploy it. Reliance is a stock which I would stay away from at the current moment and look at only about 10-15 % lower.

2. HCL Tech results again underlined the poor results of Infosys. Infosys was and is a great company. It is not going away anywhere but it is losing its aura where it could command a higher premium both in terms of its pricing with customers as well as on the markets. The other IT companies are catching up with it.

3. Infy decision to freeze salaries as well downsize variable pay is going to increase attrition. People with Infosys on their CV are in demand in the market. Infy may see a spike in attrition from the current 12 pc to about 15-18 pc.

4. Spain worries come and go. It will still be some time before the bubble bursts and till then its trading time in the markets.

5. The markets are oscillating in the zone of 5200-5300. Till it breaks above 5400, I expect this to continue.This time the action is focused outside the Nifty. The Nifty may not be going anywhere but the individual stocks are zooming.

6. All dips are buying opportunities as the FIIs continue to buy.

7. The US Presidential years are ones where the markets generally do well. The QE-2 will end in June and I expect the Fed to come up with some further stimulus which will act as band aid and hold the markets.

8. The RBI rate cut means a marginal relief to home buyers. It signals the end of the rate hike cycle. Further rate cuts will hinge on a good monsoon, crude prices and the subsequent impact on inflation.

9. This may be the last chance to lock in FDs at attractive rates for a period of about 5 years.

10. The strategy to be adopted for the week will be to trade light and wait for a close above 5400. It would not be a bad idea to focus on good mid cap picks.
Email ThisBlogThis!Share to XShare to Facebook
Posted in | No comments
Newer Post Older Post Home

0 comments:

Post a Comment

Subscribe to: Post Comments (Atom)

Popular Posts

  • Has the Santa Rally started?
    The markets digested 2 events of the Central Banks of the US and the RBI coming out with policy pronouncements. Let us see what they mean fo...
  • PPF: Do Not Break that PPF amount just yet
    Its is that time of the year where one plans for tax savings.PPF is one of the best schemes for tax savings and planning for retirements. Th...
  • Big Move Coming:Up or Down
    There is a big move coming in the markets this either up or down. There are several reasons why a big move would materialize. The person who...
  • Asset Classes Review and Best Asset Class for 2013
    People usually have the options to invest in Equities, Real Estate, Gold, Debt funds. The idea of investing is either to make the maximum re...
  • January: What does history tell us about January
    Taking into consideration how the market has fared in the last 12 January months, there are certain interesting observations one can come up...
  • Elections - The Trend Decider
    PFA the presentation for this month. I still believe: 1. This is a bear market rally. 2. We will go higher 12500 before elections is quite p...
  • World Markets Down: Why are we holding up?
    It was a tumultuous week for the World Markets. Europe, Shanghai and the US markets tanked. Indian Markets have fallen barely 3 pc from the ...
  • Important cues post monetary policy & assembly election results - Detailed analysis Guest Post Sanil Sonalkar
    A Guest post from Sanil Sonalkar The RBI's monetary policy announcement on 3rd May, 2011 seems to have thrown a spanner in the works and...
  • Awaiting the Results season
    It was a three day trading week and the markets went up by 0.5 %. The Results season is almost upon us. Infosys comes out with results on Fr...
  • Leg C commences upwards
    The markets closed about 2.6 pc higher for the week. It has finally broken out of a range and looks to be moving ahead. Let us look at the f...

Categories

  • 3 Fans
  • airport developers
  • asset allocation
  • ayn rand
  • bailout
  • bollinger band
  • bottom
  • bounce
  • breakout
  • budget
  • china
  • compoundig
  • correction july results
  • covered call
  • debt
  • debt crisis
  • december
  • divided yield
  • dollar index
  • domestic consumption
  • double top
  • Dow
  • dubai
  • economic superpower
  • economy
  • elections
  • elliot sensex
  • EMA
  • europe
  • FIIs
  • financial planning
  • gann
  • GM. elections
  • gold
  • greece
  • hedge
  • hot money
  • idfc infrastructure bonds
  • india cabinet reshuffle
  • India growth story
  • india infoline
  • infrastructure
  • infrastructure bonds
  • Interest rates
  • investment cherry picks
  • January
  • MA
  • National Economic Debate
  • NCD
  • nifty
  • nifty channel
  • NPAs
  • Olympics
  • options
  • P/E
  • politics stocks market
  • ports
  • power
  • rally
  • rbi
  • rbi credit policy
  • recession
  • recovery
  • Reliance
  • repo
  • reverse repo
  • RSI
  • rupee
  • seasonality
  • Sensex
  • Sensex elections 2009
  • Shanghai
  • shorts
  • sovereign default
  • stock
  • stock pick
  • stocks
  • top
  • trading strategies
  • trendline

Blog Archive

  • ►  2013 (57)
    • ►  December (3)
    • ►  November (5)
    • ►  October (5)
    • ►  September (4)
    • ►  August (5)
    • ►  July (4)
    • ►  June (5)
    • ►  May (5)
    • ►  April (4)
    • ►  March (6)
    • ►  February (7)
    • ►  January (4)
  • ▼  2012 (69)
    • ►  December (6)
    • ►  November (5)
    • ►  October (5)
    • ►  September (7)
    • ►  August (5)
    • ►  July (5)
    • ►  June (5)
    • ►  May (8)
    • ▼  April (7)
      • The Range Bound Trading continues
      • Mid-Week update
      • RBI surprises by a Rate Cut of 50 basis points
      • Infosys disappoints and weak global cues
      • Mid Week update
      • Awaiting the Results season
      • The Correction Ends
    • ►  March (5)
    • ►  February (5)
    • ►  January (6)
  • ►  2011 (85)
    • ►  December (5)
    • ►  November (5)
    • ►  October (7)
    • ►  September (6)
    • ►  August (7)
    • ►  July (7)
    • ►  June (7)
    • ►  May (10)
    • ►  April (10)
    • ►  March (5)
    • ►  February (6)
    • ►  January (10)
  • ►  2010 (94)
    • ►  December (8)
    • ►  November (7)
    • ►  October (7)
    • ►  September (5)
    • ►  August (9)
    • ►  July (10)
    • ►  June (6)
    • ►  May (9)
    • ►  April (6)
    • ►  March (13)
    • ►  February (9)
    • ►  January (5)
  • ►  2009 (45)
    • ►  December (4)
    • ►  November (4)
    • ►  October (6)
    • ►  September (4)
    • ►  August (5)
    • ►  July (6)
    • ►  June (3)
    • ►  May (6)
    • ►  April (3)
    • ►  March (3)
    • ►  February (1)
Powered by Blogger.

About Me

Unknown
View my complete profile