Wall Street closed flat despite of higher ISM data, on concerns that Fed might not adopt aggressive quantitative easing. Asian stocks are mixed, waiting for a response from US Federal Reserve, expected on Wednesday 03rd November.
RBI policy meeting
India's central bank RBI will unveil credit policy on back of higher inflation, gush of liquidity. We expect RBI to let go with a minor hike of 25 basis points this time. But RBI might talk tough on inflows which will daunt the markets.
DStreet experts are extremely bullish, the way RBI is handling the situation and all roads are leading to a golden era for Indian equities. We have a long and strong target of 35000 for Sensex by 2014 based on earnings growth and higher valuation India might command. But we are afraid we might hit the levels much earlier.
Stay invested but before pumping new funds we advice investors to wait till Diwali which might give us crystal clear picture of the impact of Fed QE2 (Quantitative Easing).