Religare Broking

May 23rd is still a long way away and it is hardly surprising that that the pre election campaigning is already reaching a crescendo. Recent markets trends appear to hint that the mini-war with Pakistan may actually help the ruling NDA. In fact, it is also believed that the sharp rise in FPI flows to about $5 billion since late February was on the back of expectations that a stable government would come up at the centre; whatever it means. But in the midst of all the noise, the real trends are never obvious. Here is why.

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After a long time, India got to see something that is close to a hostile takeover. After VG Siddhartha of Café Coffee Day, the largest shareholder in Mindtree, approached L&T Infotech to buy his stake in Mindtree, the color of the deal changed drastically. L&T Info was not only interested in taking VG Siddhartha’s stake but also in taking over full control of Mindtree. Not surprisingly, the founding fathers of Mindtree were hardly amused by the idea of a Mumbai based conglomerate taking over a startup like Mindtree. But why is L&T Infotech so interested?

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There was not much a surprise when the Fed announced on 20^th March that it would maintain status quo on rates. That means; the rates would be held at the current level of 2.25%-2.50%. In fact the CME FEDWATCH, which gauges probability of a rate hike based on Fed futures pricing, was already assigning a 99% probability to the status quo. Hence the markets were almost resigned to a status quo on rates. But what really surprised the markets was the starkly dovish tone of the Fed.

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The meeting of the RBI Monetary Policy Committee (MPC) on the 04^th of April is likely to be one of the most keenly awaited monetary policies. The RBI had obliged the money markets by cutting rates by 25 bps in its February policy. Will the RBI oblige the markets with another rate cut or will it prefer to wait. Let us look at the macros first!

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In the last few months, the NCLT and the NCLAT have certainly come of age. That is good news as it means that the insolvency and bankruptcy process should go through a lot more smoothly.
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