Stock Market update:
The year ahead looks challenging for the IT services industry, with slow recovery in the global markets.
The US markets had a good day of gains on the back of favourable economic conditions. An indication from Federal Reserve policy makers that interest rates will remain low added to the market sentiments.
RBI Policy:
We expect a 25 basis point (bps) cut in the upcoming policy review. An aggressive move by the RBI by reducing the cash reserve ratio (CRR) along with the rate cut cannot be ruled out given the recent index of industrial production (IIP) numbers. The banking stocks will benefit from this move as the cost of funds will reduce and the risk of high non-performing assets (NPAs) will also come down going ahead.
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