Busy Season Credit Policy

Busy Season Credit Policy is out and RBI keeps key policy rates unchanged. Cuts, CRR (Cash Reserve Ratio) by 25 basis points to 4.25%.

RBI actions are on expected lines considering rise in inflationary pressure due to increase in diesel prices.

Market, had already discounted this possibility as a result was trading in narrow range of 18600 to 18800 levels. However, retail investors reactions are more eminent with policy announcements which as a result has plunged Sensex around 1.50%

Going forward, market may also en-cash this opportunity for corrections, which may happen in intraday today itself. Having said that BSE has strong support at 18440 & NSE at 5600 levels.  FII (Foreign Institutional Investors) are overweight on NSE-50 Stocks –so as Large Caps are flavor of the moment.

We are strongly recommending to en-cash current opportunities by participating in same, and there-after if opportunity multiplies.

Fresh participation in Debt market is also benefited with the postponement of interest cut, leading to comfortable 9% annualized TAX FREE – RISK FREE returns. 

Season Greetings

Right time to enter market:

Strong message has been sent from Govt. last month. Same is time and again getting clearer and louder. Markets have moved to new trading zone. However market swing to tune of 3%-5% downward is never ruled out due to unprecedented event or knee jerk reactions to negative news. Undertone is bullish and Long term investor should buy with each fall.  

Low trades were seen in last couple of weeks, due to inaction from BULLs so as BEARs who are weighing each other next move visa- Vis market sentiments. In market parlance, its termed as consolidation before new trend sets in. The upcoming RBI Busy season credit Policy is expected to initiate rate cut directly or at-least indirectly to fuel growth.

However, for those who don’t want to take any risk, there is always risk free avenue (Debt Funds) since opening of economy in 1991-92 -A solid alternative to Bank Deposit yielding Tax Free returns of 8% plus with 100% transparency and liquidity option.