RBI rate cut near certainty on Sept 29 after US Fed’s status quo on rates

The US Federal Reserve chief Janet Yellen late on Thursday almost made sure that her counterpart in India, Raghuram Rajan, the RBI chief, gets enough room to cut rates in his next policy review meeting on September 29 Stock Market Trading Tips

On Thursday night the US Fed chief decided to keep interest rates in the world's largest economy unchanged that Indian fund managers and economists see as another enabling factor for RBI to cut rates, a decision which could give some more boost to the Indian economy which is again showing signs of stagnation. For the Indian equity market, the immediate trend decider would be how the global markets react to the US rates decision, they said.

"The US Fed's decision to not increase rates is positive for interest rate in India which is now expected to come down," said S Naren, chief investment officer, ICICI Prudential Mutual Fund. And as for Indian equities, "they continue to be attractive long term investments in the light of continuing redemptions in the emerging markets," Naren told ToI soon after the US Fed decision was announced on Thursday night Indian stock market astrology prediction

Going by the tone of the US Fed's language in the press release on rates decision, fund managers and economists here said even a rate hike in December now seems to be uncertain. "Given the uncertain global environment, it looks increasingly unlikely that the US Fed will hike rates in 2015. Even though the Fed chief has emphasized that the current global developments are transitory, it is the evolving macroeconomic situation which looks delicately poised," said Soumya Kanti Ghosh, chief economic advisor, State Bank of India. For India, Ghosh too agreed that "RBI will get more room for accommodative monetary policy stance" in its policy review meeting later in the month.
In case there was a rate hike by the US Fed on Thursday, chances were high that FIIs would have started taking money off emerging markets, including from India, which are considered risky investments by global investors. With Yellen maintaining a status quo on rates in the world's largest economy, which could otherwise have been the first such decision in nearly a decade, FIIs are expected to keep faith in the Indian stock market for the next few months, market players said Commodity Market Astrology Tips