NIFTY up 6% wow on dovish statement from RBI & positive measures from the EU summit Goldman Sachs,

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NIFTY up 6% wow on dovish statement from RBI & positive measures from the EU summit
 CNX Energy rose 6.4% wow while Public Sector banks (-1.0%) underperformed broader indices.
 Ytd foreign outflows of US$366 mn and domestic inflows of US$5.3 bn as of close of Oct 24, 2011.
 The RBI hiked key policy rates by 25bp and freed up the savings bank deposit rate with immediate effect.
 It revised down its FY12 GDP growth forecast to 7.6% from 8% and expects inflation to moderate to 7% by Mar-2012.
Overview
NIFTY climbed 6.2% in a short trading week with
encouraging macro news flow. After delivering
the 13
th
 hike in policy rates since Mar 2010 (25
bps, in line with consensus & GS expectations),
the RBI struck a relatively dovish tone in its
statement. The EU summit produced a package
that included a leveraged EFSF to provide more
than EUR 1 tn, “soft” restructuring of Greek debt
(including a “haircut” of 50%), and a new
insurance scheme to allow the EFSF to guarantee
new debt issued by a peripheral sovereign.
NIFTY price performance
Source: NSE, DataStream, GS Global ECS Research.
Foreign and domestic flows
Foreign investors sold US$93 mn wow (as of Oct
24, 2011).
Earnings sentiment
MSCI India Consumer Discretionary saw the
strongest EPS sentiment (15% wow) while
Industrials had the weakest EPS sentiment (-20%
wow).
Commodities
Commodities surged 5.3% wow, led by Copper
(+8.2%) and Energy (+8.6%).
2QFY12 earnings results (Ex 23-24)
Wipro, ICICI Bank(Oct 31); ACC (Nov 01)
Economic data releases
Sep Trade (Nov 01)