Markets Surge, Call Rates back to normal
As predicted, the Indian stock markets opened strong and maintained the momentum throughout to close significantly higher. The Sensex closed 549.62 points (5.62%) higher at 10,337.68 and Nifty closed 158.25 points (5.48%) higher at 3,043.85.
In the Asian markets, Hang Seng closed 2.69% higher, Singapore 5.99% higher, Korea 1.44% higher and Taiwan 2.55% higher. European markets are currently flat - FTSE is up 0.41% and DAX is up 0.55%.
The call rates have cooled down significantly. They are currently at 8%, which is significantly lesser than the 21% quotes that were there on 31/Oct.
On the interest rate front, some public sector banks had slashed the rate and ICICI Bank has said that it would review its interest rates in the coming days and adjust it based on market situation. But it is not very practical to expect significant rate cuts now. The confidence and demand needs to pick up and the rate cuts would anyway be preceeded by a drop in deposit rates.
The prime minister has made a statement that India will take all necessary actions (monetary or fiscal) to ensure economic growth. But he did say that the current crisis could be more prolonged and would have an impact on our growth rates.
