The week closed on an expectant note. The market expects the government to do effective damage control. The expectations are centered around clear action points. FPI concerns need to be addressed credibly. The NBFC crisis needs a resolution of liquidity issues. The reserve bank must decisively lower interest rates. Banks must transmit the interest rate cut to their borrowers. The auto industry must get into a course correction mode and work towards pulling itself out of its pessimism. The rains were good in the second fortnight of July and the trend needs to sustain in August. The markets are clearly looking to put the pain behind. But, something or the other keeps cropping up.

A prominent businessman’s suicide was a shocking setback to sentiment. Another clear spoiler is that NBFCs are persistently selling pledged promoter shares. Companies are failing to meet obligations of all kinds. The funding activity of all formal lending systems stands corroded. The informal lending chain has come to a standstill.

There is an air of despondency. Everybody is looking to government for a sentiment booster. The coming week is very crucial. The air must be cleared soon enough.

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