The end of the operation to flush out terrorists on Saturday, 29 November 2008 and expectations of further cut in interest rates may lift the market which on Friday, 28 November 2008, shrugged off major terrorists attacks on Mumbai, Indiaâ€(TM)s financial capital late on Wednesday, 26 November 2008. There are expectations that the Reserve Bank of India (RBI) will cut rates further to shore up confidence battered by the global financial crisis and the series of attacks around the city.
With P Chidambaram set to take over as the new home minister, there is a perception that the RBI may gain more breathing space while making policies. There has been criticism in recent weeks that a series of policy measures were being driven by the finance ministry. But now with Prime Minister (PM) Dr Manmohan Singh, himself a former RBI governor, holding additional charge of the finance ministry, the prospects of the governor coming into his own are far greater.
The PM, the architect of early 1990s economic reforms, holding additional charge of the finance ministry will also be perceived as a positive sign for the stock markets in terms of ensuring continuity and signaling a pro-reform image even though just a few months are left as parliamentary elections must be held before May 2009.
Asian markets were mixed. Japan's Nikkei average fell 2% by midday as global recession fears prompted investors to book profits after last week's rally, with exporters such as Toyota Motor Corp slipping on a firmer yen.
Early results from the Black Friday weekend that marks the start of the Christmas shopping season in the United States showed that sales grew in shops and online, fuelled by repeat trips and deep discounts. But an early rush is unlikely to save what is shaping up to be a bleak sales season, reports suggest.
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