Views of Mr. Jimeet Modi, CEO, SAMCO Securities on Fifth Bi-Monthly Monetary Policy Statement, 2015-16

“Overall, the RBI Policy was in line with expectations. There were no expectations of any action in the policy rates and the RBI has acted in line. One positive commentary was the urgency to link the final base rate to the marginal cost of funds. Effective implementation of the same shall result in faster transmission of rate cuts to the end borrowers. The markets and the RBI will keep a close watch on the FOMC and that shall be a key determinant of future policy action. Indian markets will largely track global market movements until January-end when the expectations shall getting build for the Budget.

Only key trigger could be the possible passage of the GST bill in the winter session of the parliament. Failure of passage of the GST could dampen the mood and could result in the markets going into a downward spiral to test the recent lows of 7500 levels. We expect the markets to consolidate in a narrow sideways range due to the lack of any meaningful triggers in December.”