The so called QE3 program in the West announced yesterdaay ofcourse is another bond buying program with $40B per month and it remains to be seen if the $40 B infusion is made in terms of fresh dfunds into the system, the Fed having a lot of inventory it keeps selling too. However, the local Diesel and LPG hikes to Rs 51/52 and Rs 800(any CMP after the 12 allotted cylinders per family) respectively will definitely be inflationary and the relief in today afternoon’s monthly WPI announcement.
Yesterday’s announcement of dip in exports of 10% in August remains a matter of some concern after a 14% dip in July but the performance is still $22 B in exports and at least $2.6B value reduction in Exports has been offset by that lower import of Gold and Silver this month. The higher duty cliff imposed by the Central Bank has become effective as the weaker trend in Gold and Silver prices is then encouraged in the precious metals world wide and Indian prices stabilise. The recent run in Silver however is likely to continue given the QE injection and the soon to be approved Spanish bailout whuich is still likely before the holidays as the Spanish try to come out on top of it politically
The markets have hit 5500 in the Pre Open and it is true festive time that a minimal regulation champion has survived globally in India at tis clip of 5-10% growth in the coming years while others experiment with over regulation to come back to a new normal