Buoyed by the better than expected performance of corporate India, the end of July has seen the sensex revisiting 15,000 levels. July witnessed inflows worth Rs.11,066.30 crores ($2.28 billion) in the Indian stock market and the stock market rose over eight per cent. Besides, the total FII investment so far this year has crossed USD seven billion.
Better cost controls, reversals in forex losses and a fall in input prices led to a better than expected corporate results. Consumer goods, financial and IT earnings were ahead of capital goods earnings which were a mixed bag; however robust order books indicate there will reason to cheer later in the year.
In its monetary policy meet in the last week of July, the RBI indicating a wait and watch stance given that the Indian economy has still not shown clear signs of stability has left all the key rates unchanged. This is unlikely to change until there are definite and robust signs of recovery. The growth expectations for FY10 have been maintained at 6% levels with an upward revision bias. The targets for inflations and M3 growth have been revised upwards. On an immediate level the outlook on food price inflation is definitely upward considering the uncertain monsoon.
This article is written for InvestmentYogi by Lovaii Navlakhi, IMM.