Devangshu Datta: A bad-news-is-good-news scenario

The last fortnight has seen several central banks releasing their respective advisories and policy updates. Monetary policy has mostly been left unchanged by the major banks even though the statements have been dovish.   Stock Market Trading Tips

The Reserve Bank of India's (RBI) next policy statement is on April 5. Consensus favours a rate cut. This is already priced into market action. The data in favour of a cut would seem to be fairly compelling. If you take the combination of weak manufacturing trends, lower-than-expected inflation and an overvalued rupee, a rate cut certainly seems obvious. Financial Astrology

Manufacturing remains in the doldrums since the Index of Industrial Production (IIP) has seen negative year-on-year (YoY) changes for three months in a row (November 2015-January 2016). Inflation is down for February 2016. The Consumer Price Index (CPI) saw YoY change of 5.18 per cent, which was lower than January 2016 (5.69 per cent) and also lower than consensus estimates. The Wholesale Price Index (WPI) for February saw negative YoY change for the 16th month in a row. Exports also fell, for the 15th month in succession.  Personal Numerology

The US Federal Open Markets Committee was decidedly dovish. The Fed is cutting growth and inflation estimates while holding to its belief that "moderate economic expansion" will continue. The chairperson, Janet Yellen, said that "caution is appropriate". The market interprets this to mean that the Fed is not likely to hike the policy rate more than twice in 2016. The USD plunged and gold went into a speculative rally.The European Central Bank's statement suggests that it will remain accommodative in terms of bind buying.  Share Market Astrology

Meanwhile, China's slowdown continues to cause concern. The data for January and February are clubbed together due to the Chinese New Year. Retail sales and industrial output rose 10.2 per cent and 5.4 per cent year-on-year, respectively, and both numbers were well below consensus expectations.    Jackpot Stocks Trading Tips

The rupee has gained nearly three per cent versus USD since the Budget. It has gained 1.5 per cent against the yen. But it has actually lost ground versus the Euro (down 0.29 per cent) and the GBP (down 1.18 per cent). The strength versus the USD is partly due to inflows from foreign portfolio investors (FPI). Interestingly,  Indian stock market astrology prediction

Apart from the Budget itself, sentiment has revived to some extent because there appears to be progress on the ground in terms of reviving stalled projects. Protectionist measures should also enable the domestic steel industry to turn around. The UDAY (Ujwal Discom Assurance Yojana) programme buys some time at least for the debt-laden power sector.