CBI-IMMEDIATE MARKET ATTENTION!!!!!!!!!!!

C-Crude: Above 65$ will be a issue for emerging markets. This can play a spoil sport on the currency and BOP economics for India. We need to closely watch whether its a short term phenomenon for the ARABS to make their Armaco IPO successful next year. We believe its a one year bullishness for a fall again later. So buy on dips in India equity is a call in case of C stands for.

B-Bail-in. The new weapon to safeguard banks using depositors money. This is doable and is done in many countries. But is it really required now is a question which we need to address. This will have a cascading effect as depositors will start pulling their money out of banks and will have a very bleak outlook for the economy. There will be credit slowdown and also raise in interest rates due to lack of liquidity. This is a probable outcome, but we feel this is not a going to be passed in the parliament and will be a bill of a future date.

I-Interest rates. From falling interest rate to rising interest rate is a question that we need to ask. 7.15% G-Sec is a not good situation as liquidity is tight to Demo-GST. Close watch on the Government spending and borrowing program for the PSU recapitalization and infra spending. US incresing the interest rates gradually is also to be watched. One thing for sure, we should not expect any further reduction in interest rate from RBI as its already frontended and REPO is already at 6.75%.

Overall it would be advisable to buy on every dips and not to worry about the CBI in long run.

Further details do connect with PFS and team