RBI may finally go for a 25 bps rate cut in August if a good monsoon contains core inflation at a moderate 4-5%, as per report of Bank of America Merrill Lynch (BofAML). BofAML had expected a 25 bps rate cut in the Feb 8 policy meet considering the demonetization shock, low inflation, lower fiscal deficit and a stabilizing US dollar. The report noted that the RBI has also cut down inflation risks broadly in proportion to its own forecasts.
A New York capitalist billionaire, Donald Trump, who tapped into the disquiet of poorer and insular America for an unlikely electoral march to the White House will be on oath as the President of the United States at noon on Friday. Barack Obama is set to leave the White House after eight years, making way for the 45th President of the U.S. The eyes of the world will be on U.S and Trump since he takes the Oath of Office and offers his inaugural address during a ceremony that dates back to George Washington tonight at 10 pm at Indian time. Trump’s sworn-in is set to unleash a cascade of stock-market anxiety.
In Market, the Dow Jones Industrial Average has returned about 8% since his election victory on November 8, the S&P 500 index boasts a return of 6.6% and the Nasdaq Composite Index has seen a return of more than 7% during that period, as per data.
Mid-Cap & Small-cap indices have staged a sharp recovery since demonetization. The BSE Small-cap index has gained 11.8 percent, and the BSE mid-cap index has gained 11 percent since December 26, 2016. The BSE Sensex, which had hit a low of 25,807 points on December 26, has advanced 6.2 percent to 27,411 levels since then.
Between November 8 (when demonetization was triggered) and December 26, the BSE Mid-cap and Small-cap indices lost 11.5% and 11.2% respectively. However, it is expected that both Mid-Cap and small-cap stocks to remain upbeat at least till the Budget presentation.