Subbarao has been one of the most respected RBI Governors as he is credited for putting in place explicit safeguards for the Indian financial system in view of global financial crisis.
"It really does not make much difference whether banks lend to the government or lend to the corporate sector. So, SLR reduction does not change things."
"It clearly says the government must achieve 3% in the medium term. Now we will have to wait and see whether medium term is interpreted as FY16 or FY17 or something beyond that. "
Our view is that rates do have room to move lower. A look at falling inflation does suggest that there is room to cut rates further."
"We are on course to achieve the inflation target. It clearly suggests that any further rate cuts were not warranted at this point."
I personally feel there is a distinct chance that the next down leg, whenever it comes, will be caused by global cues, says Irani.
"Axis Bank has revised its base rate from 9.85 per cent to 9.50 per cent per annum with effect from October 5," the bank said in a statement.
Jaitley said, "Indian corporate would also now be able to raise ECB through rupee denominated off-shore bond with no end use restriction."
"It has also been decided that government will undertake review of small saving interest rate also," Economic Affairs Secretary Shaktikanta Das told.
After hitting a low of 6.15% in December ahead of RBI policy review and after the disappointment of no rate cut, 10-year yields had already inched up to 6.50.
RBI raised inflation forecast to 4.3-4.7% in third and fourth quarters of ongoing financial year.
Nifty has recovered some of the losses, but is still below the key H&S neckline of 8055, suggesting the potential for even sharper falls towards 7200 or 6850.
Indian business sentiment fell for the third consecutive month in September amid subdued foreign demand and a sharp depreciation of rupee, survey said.
Citing reason for lag, it said, one possible factor could be changes in liquidity conditions as these can reinforce or negate the changes in policy rates.
The rupee fell 16 paisa or 0.24% to close at 65.89 per US dollar after overseas investors sold local stocks mirroring weakness in global markets.
'There is a problem in the fundamentals more than just looking at European market and saying they have triggered the fall."
The committee is likely to assess this in the light of inflation amid the rupee's rising value, respondents said.
Retail inflation at 3.7% in August is much lower than RBI's guided path target by January and there is a room for at least 25 basis points repo rate cut.
A higher opening of the domestic equity market also supported the rupee but the dollar's rise against other currencies overseas capped the gains, dealers said.
"Provision write back will depend upon what values will be emerging as a part of the resolution process."
Whatever President Obama has to say it will have a cursory effect in terms of improving the sentiment within the country but it won't have much of an effect on stock prices.
Tthe market unless it is fed by an incremental liquidity flow coming from the various central banks’ monetary easing policies, will move down for some time.
UBS has revised downwards India's GDP growth projection for the current fiscal to 7.1 per cent, from 7.5 per cent earlier.
After repeated calls from RBI to pass on the benefit of repo rate cut to customers, private lender HDFC Bank and state-owned Canara Bank had cut their respective base rates.
Another banker said mid-sized ceived were as high as 9.43%, about 150-160 basis points higher than he benchmark bond yield.
A cyclical recovery is under way and GDP growth is expected to improve to 7.8% this fiscal from 7.3% in 2014-15, a Nomura report says.
India's economic recovery is losing some steam and there is a likelihood of slowdown in the growth momentum, says Japanese financial services firm Nomura.
'The recovery in Indian economy will be led by domestic demand, with factors like consumption, public capex and foreign investment playing key part.'
The improvement is mainly on account of buoyancy in tax collections, which have kept revenue deficit in check.
On the non performing assets situation, Mundra expressed some optimism but said RBI will be vigilant and continue monitoring the situation.
Indian equities are likely to continue its bullish run this year on the back of improved corporate earnings, according to a Assocham report.
"With RBI clearly mentioning that inflation trajectory is evolving as per expectations there are reasons to believe that it will continue in an accommodative mode."
'With the MSF being relaxed, we feel that some more liquidity will be eased off, up to say Rs 200 mn, which will fuel the economy further,' says Yogesh Mehta.
Slowdown in crude prices is also likely to suppress tradables inflation, and subdued corporate performance made a clear case for further rate cut.
Reserve Bank of India Governor Raghuram Rajan warned on Friday that straying from fiscal consolidation.
"This is also broadly in line with the Ind-Ra view on retail inflation in India which is likely to rise by an average of 4.9 per cent in 2016-17," Pant said.
Lenders have asked the Reserve Bank to reduce the risk weights on assets while allocating capital down to being at par with the global level.
Analysts attributed the marginal rise in VIX to the uncertainty over the forthcoming money policy review.
The finance ministry is finalizing product-specific rates and sources said the impact would be higher in case of maturity period of less than five years.
Rupee made a smart recovery and appreciated 6 paise t0 63.98 against dollar in intraday trade today ahead of RBI's meet.
There are plenty of reasons to continue with an aggressive accommodative monetary policy stance. The RBI has offered a ray of hope to the markets.
If we look at the long-term history , CPI inflation has on average, been approximately 2 percentage points per annum higher than WPI inflation.
In newly published book about his days as RBI governor, Subbarao was very critical of Chidambaram and Pranab Mukherjee, who served as finance ministers during his tenure.
Domestic institutional inflows, which have propelled the market to near lifetime highs this year, are likely to get stronger going ahead, said Agarwal
Not ruling out rate cuts for this year, brokerage firm Tata Securities said RBI will be in fact hiking the rates from 2016.
Forex dealers said besides dollar's gains against other currencies overseas, increased demand for the American currency from importers put pressure on the rupee.
Nobody is expecting a rate cut in the 2nd December RBI policy. It will probably be flattish around for some time.
Having grown their loan books 10% during the past decade, non-banking finance companies (NBFCs) credit growth is set to accelerate further in the coming decade as well.
The RBI Governor has made it very clear that he is committed to fighting the inflation. He is committed to giving a real rates to save us.
Investors seem to have turned bullish on interest rate futures (IRF) as capital markets registered about 21 per cent jump in turnover.
"Although Ind-Ra believes RBI's policy stance will continue to be accommodative in the near term, there is no scope for further rate cuts in 2015-16.
"A large part of that will be because of low global prices of crude oil, because the base effect is likely to wean out somewhere around May or June."
"I am looking at a range of 6100 levels on the downside and the levels of 6230-6250 on the upside," Wagle said.
The bond market reacted to the stance taken by RBI. If you are overweight on corporate bonds and accrual and short-term funds, there is nothing to worry about.
Nifty50 futures on the Singapore Stock Exchange were trading 12 points lower at 8,787, indicating a flat to negative opening for the domestic market.
The Finance Ministry has warned employees of disciplinary action if they criticise the government or its policies.
On an overall basis, it is not a tightrope walk only for rating agencies but generally the macro picture in the economy, says Parthasarthy.
"We are looking at about 7.5% or so of GDP growth. I will tell you why. Over the last few months, the government has undertaken a series of reform measures."
Bankers feel that given the current macroeconomic scenario, Governor Raghuram Rajan in all probability will go for a status quo.
What may just come as a surprise on Tuesday's session might be a 25 basis points rate cut by the Reserve Bank of India, says Dutt.
The rupee had lost 28 paise to close at 62.01 against the dollar in yesterday's trade on possibility of interest rate hike by the RBI.
The economy would post its fastest rate of growth since the Modi administration came to power if monsoons are good, says Neelkanth Mishra.
"The corporate earnings, the result season will start soon in the next months. The corporate earnings are expected to be subdued."
"We always thought there was going to be an upside to 6%, which is why we will have a rate hike," says Jahangir Aziz.
The RBI will hold its bimonthly policy review on Tuesday. As many as 12 economists said in an Economic Times poll that RBI would maintain a neutral stance.
Stocks have made a smart comeback; thanks to Yellen! It’s RBI policy review day and Rexit on everyone’s mind. Elsewhere, things are getting tricky for pharma cos.
Two PSU banks, Central Bank of India and Syndicate Bank, today announced a cut in their lending rates while two others reduced deposit rates after RBI lowered the policy rate by 0.25 per cent this week.
Allahabad Bank cut its base rate or minimum lending rate by 0.3% within hours of RBI lowering key policy rate for the third time this year.
If we see Bank Nifty starts getting below 18,400, then you might see the banking stocks to go through some kind of strong correction.
It is being rumoured that banking licence announced any time probably in the next RBI policy in the first half of April itself.
Trading for the week began on a negative note. Telecom, cement and pharma stocks led the rally as key benchmark indices surged.
The newly launched interest rate futures (IRF) contract on the stock exchanges -- BSE and NSE -- saw trading worth a total Rs 2,273.36 crore on its debut day.
Even though global EM funds are cutting weightage on Indian equities, but global funds are slowly increasing their weightage.
The Reserve Bank of India on Tuesday maintained status quo on policy rates at the third bimonthly review, citing upside risk to inflation .
Services sector is stable, as is agriculture and consumption, Demand is still there,.
"The food inflation is something that RBI would be keenly watching out for and the trajectory would determine rate action."
Unless it breaks that range we do not see any kind of a major trend move. At this point the index oscillates between the two.
The partially convertible rupee trimmed early gains and slipped to 60.89 per dollar after touching intraday high of 60.83 before the policy outcome.
Many important triggers could make or break the market in January and once they are played out, will take a medium- to short-term call, says the BSE member.
India Inc expects some relief in interest rates in RBI credit policy as inflationary expectations are likely to prevent RBI from effecting a bigger cut.
NSE and BSE today said they will begin trading in interest rate futures (IRF) with tenures of one-three months, with underlying of 10-year govt bonds.
India Infoline Housing Finance expects home loan interest rate cut to benefit affordable housing segment borrowers, it said in a release.
The report said that FPI equity flows to stall until markets price in its three event risks -- Fed rate hike, earnings and Bihar polls.
"It is quite clear that RBI is not averse to cutting interest rates. It's just that there is a need to see an augmentation of the transmission mechanism."
Analysts expect the rupee to remain under pressure and test 66.50 against $ in the near term, which could pose a challenge to RBI.
"We have a relatively short window of opportunity to cut rates at this stage. That opportunity was not taken advantage of."
"I am sure they have looked at the various data points and taken this call only after that. So, it's probably the best thing now to keep rates stable."
With expectations running high ahead of the RBI policy, market participants are hopeful that the RBI would be able to slash policy rates.
I would definitely exercise caution and play light, but individually you will get stocks to play for, says Wagle.
Interest rate cuts will be the next big trigger, say Mehta. The expert though sees bleak chances of RBI slashing policy rate in its policy review on April 7.
Bank of America-Merril Lynch today said delayed Fed action will only harm India as a postponement will stall portfolio inflows and prolong volatility.
Nifty50 futures on the Singapore Stock Exchange were trading 15 points higher at 8,188, indicating a positive opening for the domestic market.
Finally, the bulls surrendered to the bears after RBI’s money policy, thereby marking a short-term top for Nifty50 with a cut of 2 per cent.
If Nifty50 holds in the 7,750-7,777 zone, it could trigger followup buying. If it fails to hold above 7,700, it may slip towards the next support at 7,660.
A 'Hanging Man' is a bearish pattern and is formed when there is a selloff in trade towards the opening but the bulls keep the momentum alive.
The Indian market is expected to open lower. Here is a list of top twelve stocks that are likely to be in focus today.
Sameer Gehlaut of Indiabulls Real Estate said all relevant disclosures related to overseas investments through his family trust and other companies have been made to the authorities.
In the three to six months perspective, we are focussing more in terms of rural and infra specifically.
The policy announcement assumes all the challenging economic environment, deteriorating asset quality of banks and declining industry growth.
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