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Saturday, March 20, 2010

Indian Stock Market To Go Southwards On Monday - RBI Rate Hike Impact

The Reserve Bank of India has raised its' short-term borrowing and lending rates by 25 basis points each. It has raised the reverse repo rate to 3.5% and the repo rate to 5% with immediate effect. What would be the impact of this rate hike stock markets on Monday? Read On..

RBI has hiked rates to keep control on ever growing inflation issue. This is mainly done to curb the uproar over inflation. Inflation in March is expected to touch 10.2%. Although 25 basis points should not make much difference, it could create downward movement in equity bond and markets. The reaction could be to the tunes of 1 - 2 % southward movement in Indian stock markets.

Nifty could experience 50 - 100 points decline. For BSE, it could be 300 - 400 points decline. I strongly believe that although markets might correct on this negative news, there would be buying at lower levels as lot of money is waiting for investment. So buying stocks on Monday fall could be a wise thing to do for long term investment portfolio. Good stocks to buy should be considered on Monday fall.

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