RBI (Reserve Bank of India) Monetory Policy Review
The most important event for today January 29, 2010 is the RBI meet in which the monetary policy decisions are to be taken. The market is expecting a CRR (Cash Reserve Ratio) hike. Now the question is how much ? The banks want CRR to remain unchanged. A CRR hike is expected to be either by 25 bps or 50 bps. However the market might have already discounted this but the reaction once CRR is hiked is still to be watched before taking any call on market.
I myself do not see much of a impact if CRR is hiked by 25 bps but yes if it is 50 bps hike then we might see some more downside in the markets. This downside (if it comes) would be of temporary nature and one should use the downside to add positions to the portfolio for medium to long term. I say medium to long term and not short to medium term because the next BIGGER event i.e. BUDGET would also decide whether we would be heading for new highs or there would be a consolidation in the markets. My advice for short term investors would be to lighten their portfolio before the budget. For traders volatility is expected so they should take the maximum out of the swings. Traders are required to not to act in a swift manner and should keep a Stop Loss as per their risk ability for every trade they enter.
Also check
Posts
No comments:
Post a Comment