Another mayhem on the cards
It could well be just another Manic Monday. The focus would have been speculation on the results. But the Reserve Bank of India has chosen to deal a nasty blow to the bourses with its tightening measures. In yet another move to curb inflation, the Reserve Bank of India (RBI) on Friday announced that it was raising the repurchase rate (repo rate) by 25 basis points and would hike the Cash Reserve Ratio (CRR) by 50 basis points in two stages. The central bank has increased the repo rate, a key short-term lending rate, from 7.5% to 7.75% with immediate effect. As panic sets in, quality stocks will be available at lower prices. Investors can hope to make some purchases at lower levels. Movement of the rupee, crude oil price and global market movements will play on the investors mind. The truncated week could see some wild swings beginning with a crash on Monday morning. In case you don't have the appetite for choppiness, stay light and watch the show from the sidelines.