RBI Monetary Policy Press Conference Live | Shakti Kanta Das | Post MPC Meet | RBI Governor | N18L

Thank you, sir. I'll request Mr. Anand Adhikari from Business Today.

Good afternoon, sir. Sir, there is a narrative suggesting that the F&O trading is impacting the household savings. And I was looking at some RBI data on the fund flow into financial assets and liabilities. This is for FY23. The share of equity trading is minuscule there. Even mutual fund is very high, FD and PF and the insurance part has a much higher share. Second, the financial liabilities have gone up, but that have gone up because of the housing, the home loan, not because of personal loan. So is it justified to link the fall in household saving to F&O trading?

So I would request that you look at household savings from a perspective which is a little different from here. As you rightly said, there doesn't seem to be much of exposure to equities in the household saving in the composition. So what is actually happening is that there is a churn going on of the precautionary savings that were made during COVID. You know, it rose to a very high level where there were no avenues to spend. That is being drawn down to more normal levels. So one aspect of household saving is that. The other aspect is that there is a shift going on from financial saving to physical saving. People are buying more houses, etc. So physical saving is actually going up. If you take both of them together, then the total household savings has stabilized at around 20%. It was falling for quite a while, now it has stabilized. So all in all, I'm seeing a return of normalcy in household saving behavior with these shifts.

Thank you, sir. Next, I'll request Mr. Anurag Mishra from Mio to ask his question.

So continuing with the same question, you had mentioned earlier also that regarding specifically on F&O, the increased volume is something which you are watching from a financial stability point of view. Now in today's policy statement also you have mentioned about the money moving towards the alternate investment avenues. Sir, SEBI has recently come out with a consultation paper on F&O whereby it aims to restrict the entry-level kind of retail participation who were losing money, and as per the SEBI data, it is around 90%. So I want to ask, with steps like these, will it help to the cause of the banks which you are saying that the deposits needs to be garnered, they need to be innovative ways, but will these steps help banks in garnering deposits?

Thank you, sir. Anurag, please.

Dad, sir. Next, I'll request Mr. Manoj Sah from Business Standard.

Good afternoon, sir. In your statement, you have said that the disinflation process is uneven due to large and persistent supply shocks, mainly due to food items. Are you happy with the way the government agencies are monitoring the supply side management? Do you expect them to improve their supply side management so that this kind of, I mean, so that inflation, disinflation process becomes more smooth towards the target?

So you are okay with the supply side management?

The question is why this additional 5%? Is there any sign or signal which you have found that this kind of, Silicon Valley kind of issues could happen? Was that a concern?

Thank you, Governor. I think Governor has rightly indicated it is a draft circular at this stage. And the LCR guidelines were issued in 2014, so it was a time for a review which was warranted at that point. And taking into account the current developments in technology, digitalization, etc., so all those have been factored in and the draft guidelines have been put in public domain. So we will wait for the public comments and then take a final call on what needs to be done.

Thank you, thank you, sir. Sir, with your kind permission, few more questions. Next, we'll have Mr. Ashish Aash from PTI.

Thank you so much, sir. So you spoke about the global outage and how we dealt with it. Also, sir, recently, due to over-reliance on a single entity, we saw quite a lot of smaller domestic lenders' customers finding it difficult to transact, doing simple payment-linked sort of transactions. What really happened, sir? How can we avoid this? How are you looking at this?

That's right. The impact was felt from an IT service provider because one of the third-party service provider systems was impacted. And incidentally, the entity was also providing similar third-party services to many other smaller banks and RRBs. Since there was a likelihood of the risk transmitting to the other systems, as a proactive measure, they had to be shut off from the payment system. That was done as a proactive measure by NPCI, and it lasted for about 3-4 days. Apart from their own internal root cause analysis, there was an external party study also conducted. Certain remediation measures have been recommended. They are being implemented. These are kind of instances where why we repeatedly insist on proper disaster recovery and business continuity plans, which has been reiterated even in this speech as well, that all service providers have got to have their DR-BC things robust, and also the banks have to have alternate venues through which they can function. So these are kind of things that keep evolving, but we watch and then provide advisory. The CERT-In has already issued its advisory as this event played out as to how banks can augment their systems and have their business continuity plans in place. We will keep assisting the entities in terms of ensuring that the customer inconvenience is minimized.

Thank you, sir. Next, we can have Mr. Lendu Mishra from The Hindu.

Good afternoon, Governor. Taking Anurag's question ahead, what is your view about the suggestion by the Economic Survey that the food price inflation should be dealt from the framework?

Thank you, sir. We'll have Miss Hamsini Kak from Moneycontrol.

Hi, good afternoon. My question is pertaining to unsecured loans. The expectation is that in FY26, there might be a little more tightening of the regulatory framework as far as project loans-related issues are concerned, and on LCR as well. In this background, would you consider relooking risk weights on unsecured loans and lending to NBFCs, primarily because the circular which was intended to sort of curb these loans, issued in November last year, is beginning to somewhere do its job? So would you want to wait it out for another one year or so, see how much of it is percolating in the system, and review it? Any guidance you can provide on that, sir?

I think you can take that question. Yes. See, the November '23 measures are having its intended impact. We are watching the incoming data, but it is too premature to say at this point in time. It's only two-three quarter data that has come in so far. So we will watch out and then see how it progresses. Number one. Number two, the growth has moderated but still keeping good pace. From about 30% year-on-year growth in some of these segments that we saw when we implemented this, currently it's running at 15-16% year-on-year, which I think is keeping in trend with overall credit growth. So I don't think that a moderation or revision of this is necessary at this point in time, but we will keep watching the incoming data. Coming to the second issue, in terms of rest of the items being tightened, I think they're all at the draft guideline stage at this point in time. And once the feedback is all collated, risk weights can be examined at that point in time and not now. Third, of course, is that on personal segment, what you would appreciate is that we only brought back what was the pre-COVID level. We had not actually enhanced in COVID times the risk weight on personal segment. Certain categories were reduced to help difficult situation. So what we did in November '23 was only to bring it back to the old level. So it's not something which got enhanced which will require a revision at this point in time. But we take your suggestion, but we'll keep watching the incoming data and take steps as may be necessary.

Thank you, sir. Thank you, sir. Next, we'll have Mr. Shian Go from The Wire.

Yes, Governor, you recently spoke about mule accounts in the system. Could you give us some insights on where these are originating from, what kind of accounts these are, and if you also could give some numbers on how many have been found in the system in terms of these mule accounts, some more data on that?

We don't keep that in terms of numbers. Essentially, what we do is reiterating on advisory in terms of the KYC process, customer onboarding process, the transaction monitoring process, proactive risk management measures. These are kind of things that we'll keep insisting with the regulated entities so that the possibility of such accounts existing or being made use of by the fraudsters is minimized. That's what we will do. The number of entries, etc., and then disabling them is part of a continuous process. We work closely with the law enforcement agencies and the ministry and the participating banks to ensure that these risks emanating from these are minimized from time to time.

Thank you, sir. Next, we'll have Mr. Vishwanath N from N Profit.

Governor, two times in public speeches you've talked about the retail deposit growth at banks and warning them that there could be structural issues in case this problem becomes bigger than it is right now. Either they're unable to or not willing to really take that extra step to attract more retail deposits. But is there anything beyond advisories and warnings that the RBI can do in this situation? Can you at any point in time push banks to actually start thinking about how to attract that deposits? Specific instructions?

Thank you, sir. Last few questions, sir, or maybe two, last two questions, sir. So we'll have Miss Shama Mishra from DD.

Thank you, sir. Sir, what impact do you see of the flood situations in various states on inflation? Can the situation be worrisome going further?

Thank you, sir. Lastly, I'll request Mr. Roy Hanada from Nikkei for his question.

Hi, good afternoon. I would like to ask about the government bond. At the end of the last month, RBI announced a new route for foreign investors to purchase some government bonds. To be more specific, I mean to ask about the exclusion against the 4-year and 30-year government bond under the Fully Accessible Route. And could you tell us the purpose and context of the decision? And what do you think of the potential impact of global investor sentiment and inflation preference for the Indian market?

Thank you, sir. With this, we come to the close of this press conference.

Ask question, sir, please. I haven't had a chance to ask.

Sir, the... good afternoon. Dr. Patra just said that... just introduce yourself so that everybody knows.

Yeah, I'm P from Inform Media. Dr. Patra just said that liquidity conditions reflect the RBI's monetary policy stance. In the last couple of months, we've seen liquidity conditions swing so that overnight rates are down by 25 basis points. So how do we read the RBI's liquidity management in conjunction with the current stance which has been unchanged all this while? And are the RBI's OMO sales also aimed at draining core liquidity?

So if you recall, some time ago there was a peculiar liquidity situation where government balances were being built up and spending was not happening, and liquidity tightened. Now we see a much better balance in liquidity conditions. So we are doing, as in cricketing parlance they say, we are middling the rate, the call rate. It's in the center of the corridor, and that's where we like it to be ordinarily. All our actions are intended to continue maintaining that. As I mentioned, that call rate is our operating target. It reflects the monetary policy stance, and the stance is one of continuing to withdraw accommodation.

Thank you, sir. So we'll close this press conference with your kind permission. Thank you all for making it interactive. I thank the top management of the Reserve Bank for answering all the questions. Thank you all and have a pleasant day. Thank you, thank you.

Balance is that something you would recommend people do?

No, definitely not. Remember your super is long-term, so that's for your career. You've got another 20 or 30 years worth of working. Clear, so the super is going to go up and down from day to day, so kind of meaningless in the biggest sense of that. Focus on the long-term trend.

It does make me worried though that a bunch of 27-year-old stock traders wearing pinstriped suits and shouting at each other are potentially going to wipe out all this money that I've been saving over the years in my super account.

Well, the first point I have to pull you up on, I'm not sure they wear pinstripe suits anymore. I'm about 20 years out with my reference. So they're all sitting at trading desks and behind screens and actually big boxes in the back of Goldman Sachs or Citigroup or something actually doing the trading. Those traders don't exist. The broader point is though there are big global forces that often influence the value of our shares that we sort of park away. These things rise and fall on global currents.

Okay, so this time what caused the big panic?

So initially Australia was reacting to quite a violent sell-down in the US on Wall Street on Friday. What we're starting to see is what's called the unwinding of the carry trade. The carry trade is when you borrow money from a country where the interest rates are very low and reinvest that money somewhere else in the world where returns are much higher. So you might borrow money from Japan which have near-zero interest rates and put those funds in say the United States or in Australia where interest rates are much higher. You get that return, that represents your profit on that investment. That only works as long as interest rates in the borrowing country stay low and stable and markets remain stable as well.

Right now in Tokyo, it's a sweltering humid late summer, 33 degrees. The locals are drinking ice-cold cans of milky soft drinks and listening to 24 Karat Gold Genis, the chart-topping single from a 16-member J-pop band called The Rampage from Exile Tribe. And there's something else making everyone sweaty: the economy is going through a massive change. Interest rates are going up for the first time in nearly 20 years.

So what happened last week was the Japanese central bank, the Bank of Japan, increased its interest rates and suggested that there could be more increases to come. At the same time, you're seeing the prospect of interest rates in the United States coming down faster than expected. That's because of a fear that the economy there is slowing. So you're seeing this great arm wrestle, this great reallocation of money. Money being sucked out of the US market, particularly that was in high-yielding shares such as tech stocks, so like your Nvidias, your Microsofts, your Amazons, and that's been reallocated back into Japan. Also, with the Japanese shares falling so violently, you see money sucked out of their Japanese share market which has been bid up and moved into Japanese bonds. And what can you do when you sit there watching your CommBank shares rise and fall? Not much. You just hang on for the ride.

Coming up, why interest rates here still aren't going down. It's always reassuring to talk to Eric, and you can read his soothing analysis every day by joining our subscribers at theaustralian.com.au. We'll be back after this break.

It seems every time there is a big story about a big kind of global share market sell-off, that what it boils down to is some exotic new product that has been invented. You know, it's credit default swaps or it's CDOs or something that people are selling to each other that nobody else can understand. Is the carry trade another one of these exotic products, or is it something that is more significant?

It's more serious this time. It really is different. We talk about in markets what we do know, what we don't know, and then what we really don't know. So this time it is different because we do know what the risks are out there. We've got the Chinese economy slowing, but we've known about that for some time and that's starting to play out on commodity prices. The US economy is slowing. What we don't know is the pace of it. Even here, we've just seen the Reserve Bank keep its cash rate on hold, although the statement was hawkish, which means that they are threatening further interest rate hikes. We kind of know that they're going to hold on until they watch inflation go down. There's nothing that seems to be lurking in the corners for markets this time. What we do know is the valuations of stocks like your CommBank shares have been bid up incredibly. So CommBank is trading at historic highs and is so overvalued. It's like when we previously walked into a shop and we were paying $10 for a lettuce. We all knew that that was so overvalued. Anyway, most of us still bought it anyway. CommBank shares are a little bit like that, has been bid up to such an extent that it is overvalued. So that's why this pullback is different. It's not something that we're all sitting here white-knuckled and scared about. We know the risks in the world. We've been living with geopolitical risks for the last two years. We know inflation's out there. So the kind of the bad stuff is already out there.

You mentioned that so much trading now is automated, it's done by big boxes sitting in the corner. Has that created a kind of different mood in the markets? Are they more mature now than they were when a whole bunch of people who'd done too much coke were frantically selling everything at the drop of a hat?

I don't know what the computers are doing, but look, there potentially the valuations and the calculations that go into buying and selling is much more sophisticated than what a desk jockey could ever figure out. So the instinct, will Commonwealth Bank hit its earnings targets this year based on what we know about the economy? Yes or no, a computer can figure that out much more accurately. But we are still talking about markets which are driven ultimately by emotion. You and I still walked into that supermarket and we still paid $10 for that lettuce because, hell, we wanted it and everyone else wanted it at the same time. Cabbage is just not the same. Just not the same. So look, markets are driven by emotions still. However, there's more buying and selling, there's more turning over. It's easier to buy and sell shares compared to what it was when we're talking about back in the day of the pinstripe stockbrokers. You had to physically ring somebody up, you had to place an order, you had to have the money. Now you can just do it at a hit of a button. Big fund managers can just buy and sell and turn over their portfolios. Liquidity, people often think it's a bad thing, but it is actually a good thing because it helps markets discover prices much more efficiently.

On Tuesday afternoon in the office, I saw you poring over the statement from the Reserve Bank along with some of our other big brains in the business section. What is the Reserve Bank saying about the future of the economy, and what do you think about how we're going to fare over the next few months?

Yeah, this one, there was a lot of scrutiny coming into this Reserve Bank meeting because there was talk just a few weeks ago, real serious talk among economists that the Reserve Bank could in fact be forced to raise interest rates yet again, and that would be a really hard shock to a lot of people paying mortgages. The reserve is concerned that there is still quite a lot of spending in the economy, but it's in different areas and it might not be those people that have just bought into a house or a mortgage. We know that those people are doing it tough, particularly in the late 20s and early 30s. They're the cohort that are really feeling the squeeze. They've just got a house, maybe they've got a young family as well, so money is just going out of the door like nothing else. There's a category of consumers in Australia, net savers, those people have never seen it better before and they're spending as well. Another factor is, and despite what we hear, unemployment is still quite low in the economy. If you're starting a business or if you're still trying to hire, it's maybe eased up a little bit, but it's very hard to get labor, to get workers in the door. So the RBA is still concerned, like the economy is still sort of maybe a little bit too overheated, and that's why they're talking about potential for the rate hikes.

Eric Johnston is an associate editor with The Australian.

16,000 US Marines should be deployed to Australia every year to help us defend ourselves. That's according to a report revealed in The Australian today. Check it out at theaustralian.com.au.

India's market news headquarters. Cutting-edge analysis, influential insights, market-moving intelligence. Broadcasting live from the CNBC-TV18 Multicom Studios in Mumbai.

Good morning. You're with us here on a fresh new edition of Bazaar Morning Call. It's a Thursday morning. We are coming to you live as always from the CNBC-TV18 Multicom Studios, and I think today will be the day when we say that the Nifty has crossed past 25,000 in a clean, nice way. Not this point, this much left, or 30 points left, 20 points there. Three days now the market's been biding time ahead of the Fed event. That's done now, and as the GIFT Nifty is indicating, it's going to be a good start. I'm Prashant Nair. My colleagues Nigel and Sonia are with us today. Guys, hi, morning.

Hi, good morning. I like your confidence. I mean, don't spoil the party. AJ is down, but yeah, you know, I remember on closing it was day before yesterday you guys were taking bets. I'll take a bet. It's much more certain, it's a safer bet, right? He's playing the odds well.

Well, and we've got plenty of cues, right? The Fed didn't disappoint overnight. You've got plenty of result reactions, and then you've got that tax notice on Infosys. So we've got an action-packed day ahead, and it's Nifty weekly expiry as well. So Prashant, let's kickstart.

Absolutely, and definition of hands-full, absolutely. Well, let's just quickly sort of rewind the clock back and take you to what the Fed did, because I think that's the big mover this morning for Asia, for India, for I mean so much else as well. So you had the Fed Chair Powell now basically confirming the Fed is closer to a cuts, rate cuts, if data cooperates. That's point number one. Essentially, I mean the gist of all of it, the press conference, the statement, the Q&A, everything is essentially that they're closer now. And the important thing is that all of the commentary essentially suggests that the bar for a September cut is not very high. They're not fixated on one point on you know the data being this or that. It's a process, as Chair Powell in the Q&A sort of addressed many times. The market's base case as a result has moved to a 25 basis point cut in September. That's the base case which the market is building in. But if you look at you know what the market pricing is indicating last night after the Fed meeting and everything, it moved up to 30 basis points for September. So that is you know you essentially that suggests that maybe some are saying 50, could it be 50? Well, let's not go that far. 25 is the base case and the market's now kind of very anchored towards the fact that we will get 25 in September. Remember, they're still data-dependent and in that sense the job market data tomorrow, Friday, is going to be important, the monthly number, the NFP which we get. US equities responded. So NASDAQ was up 2.6%. There were earnings to board as well, I'll get to that in just a bit. But the S&P was up about one and a half percent. Yields across the board, the 5, 10, 30, everything came off very sharply, between 10, 11, and 15 basis points. The 10-year on the US was down 11 to just about 4% now. So you know, it could be 3 point something from 4.5, 4.6, not very far away. That's a big change. And of course the dollar index is below the 104 levels, around the 104 levels as well. So dollar is also weaker now. After the New York close, you had Meta which reported earnings and the earnings beat expectations. It's one of the so-called Magnificent 7 and the market is watching the signaling impact from this very closely. Remember, so far what we had from Microsoft and early last week has not been all that great, Google etc. But Meta beat. There was also Qualcomm which gave a bullish forecast and I think this is adding to optimism that maybe what we saw overnight will continue this morning and into US later as well. Oil prices, I mean they sort of fallen one way 8% or so till day before yesterday over the last one month, but there was this geopolitical premium especially in the Middle East. So there was a 3% pop. I think we're back above 80, 80 and a half dollars a barrel. You know, the impact, the implication from a Fed cut, I mean it's not as if Fed hikes have hurt markets, global markets. Fed has hiked interest rates by 500 basis points, but the US market is at a record high, the Indian market is at a record high and global markets have done very well. But for emerging market perspective, what matters from a Fed perspective is essentially flows, foreign flows, which have been hard to come by lately. Last three days FIIs have been sellers and the market has struggled. And the sort of idea is if that starts to turn, you essentially get one more support apart from domestic liquidity. So circling back to specific levels, on the way up, as I've said, the resistance for the Nifty essentially is 25,000 to 25,337. Focus on the upper end of that band, that's the extension level, 25,340 or so. Supports come in at the 40-hourly average which is 24,780 is the nearest support and of course 24,530 is the 20-day moving average. Bank Nifty needs to take out the recent high which was 52,340. We're very close to that level. And on the way down, Monday's low this week, Monday's low of 51,186 will be important level which the Bank Nifty must sort of defend if there is any selling, any hesitation which starts to appear. And I'll just leave you with the GIFT Nifty which I think is indicating that 25,000 par level with you know what, 60, 65 point gap up this morning. Sonia.

All right, Prashant, absolutely. So I guess the biggest positive cues coming from the Fed, right? But we do have headwinds around our neighborhood and here back at home, so I have to put that on the table as well. For the Fed, I just thought we'll you know put out the line from the statement and also Mr. Powell's press conference because very rarely do you have any Fed chief coming out and actually giving a month as to when the cuts will happen. So just for reference, the statement is up. So the FOMC statement said that in recent months there has been some further progress towards the committee's 2% inflation objective. That was the wording in the statement. But in the press conferences, when the market got the real kicker, because that's where Mr. Powell himself said that if that test is met, meaning if data continues to suggest that inflation is going down, if that test is met, a reduction in our policy rate could be on the table as soon as the next meeting in September. Not usual to get a specific timing, a specific month from any Fed chief, but that's what we got and the market was rejoicing. The US yields by the way in the tumble overnight, they've gone back to levels last seen in February. In February, early Feb is when the US 10-year had started its upward trajectory crossing 4%. The other of course headwind is oil. Brent is closer to 81 again given everything that's happening. It's almost like it's out of a you know movie, but it's not a movie, it's reality with the killing of this Hamas leader that too in Iran. So lots of geopolitics at play over there. So let's watch for that. The other global headwind is actually coming in from the way Asian markets are reacting. There's no sweeping rally across Asia. The Japanese market is down 3%, that's at the headline index level, the Nikkei. The Topix is down almost 4%. So that market's sort of reeling under its own issues with the Bank of Japan cut coming in yesterday. The Yen has crossed 150 to the dollar, huge weakness in the Japanese currency. So those are some of the Asian cues to keep on board. A lot of regional markets like Hong Kong, even Singapore, they're all down. For us, you know, talking about the fund flows, Prashant mentioned that FIIs, they've been net sellers for a while. That continued yesterday, sold off stocks worth about 3,500 crores in the market. Good news as usual is that domestic institutions are buying. Their buying was almost offsetting the FII selling at 3,300 odd crores. Results of course our team is going to tell you more, but it's been a sort of a mixed picture after market hours. Just to give you a flavor, Nigel tells us that Tata Steel was more or less in line. Bajaj Finance has been a bit of a mixed bag. The asset quality is improved because they've sold off a lot of bad loans. The margins however are under pressure. So let's see how the street reacts. Then you've got some strong earnings, GTND would be one I'd watch for, very very strong top and bottom beat coming in over there. It's a very heavy results day today as well. The names are on your screen. ITC, Tata Motors, Sun Pharma, lots of interesting large mid-caps like Thermax, Emami as well as Zydus. So we have our hands full and as if we needed more, there's a big Infosys news to react to as well. So the news is that the company has received notices from two separate entities at the state level, it's the Karnataka State GST Authority, and at the central level it is the Director General of GST Intelligence. The demand is 32,403 crores. The company is outright denying it, saying that it's already met all its obligations. We'll talk about that in more detail in just a bit. This maybe is going to be a bit of a dampener on that stock at least for the day. Let's see if it has a ripple effect across the sector, but it's a big one and that's a big number, so it's something that can't be ignored.

Well, that's right. You know, the positive overnight cues, that's what's going to help the Nifty get to around the 25,000 odd mark. But the question is, can we stay above that level, that 25,000 odd mark? So we'll know later on in the trading session. The second point is, as Sonia mentioned, that big tax notice has come in there, but will the markets choose to look through that and in fact buy the dip? And you know, from a market perspective, I think that dip could get bought into. So let's see how that goes because that's going to be a bit of a drag in today's trading session just to start off first. By the way, today is you know the start of August and historically August has been quite a good month. If we look at the last five Augusts, well, it's been more green than red, though the last one was a bit of a downer. So August normally throws up 2 and a half to 3% move. Let's see which side we go for this time around. Global cues are positive as I said. Two indicators, one is the dollar index is weaker and the yield as well, the US 10-year yield was softer because of the more dovish than hawkish hints coming in from the Fed. Let's focus on Infosys then, and Infosys is going to be a large weight that's going to be lower. It's part of the top five weighted stocks on the Nifty itself. So you know, you'll have to see some kind of support coming in from the others or Infosys itself will have to see some bit of recovery from the lows of the day. Infosys, the weightage on the Nifty is close to around 6.1% or thereabouts. So they'll be keeping an eye on the others as well. ITC comes out with its set of numbers, but Infosys 6% will start off a little bit low. So let's see what kind of buying we see on that one. Positioning on index futures, the FIIs, they remain net long. Clients remain net short with close around 60,000 contracts on the short side. It hasn't moved much, that's why I haven't given you the change overnight. What about the options data? Today's weekly expiry and two strikes were fairly active, the 25,500 call and the 24,900 put. So just plugging in those premiums out there, you'll get the broad range. On the upside, 25,500, I've been saying this from the start of the week that that's a bit of a resistance level and because of the options data, you know, that's the vicinity that we're looking at. On the downside, support comes in at around the 24,800. For today, the 24,850 mark becomes rather important. The Nifty Bank, that's going to be the mover for broader direction and you know, from here on, because it's spat in the middle of the 20 and the 50 DMA, which side it moves, which side it breaks through, that's going to be important. For the time being, it's about in the middle out there. The 20 DMA a little bit away while support is at the 50 DMA. The stock I'm looking at is Tata Steel. The numbers actually showed a bit of an improvement. The problem is that you know, they're waiting by for a Supreme Court word with regard to whether or not the states can go ahead and levy taxes retrospectively. So that's going to be important and that could weigh on the stock. So though the numbers are important, I think the street takes note of the debt in the books as well as the crucial verdict that's awaited. So that could be a stock of the day. Never get away from taxes, right? Company level, personal level, taxes are a reality and they you know hold the key to our happiness or unhappiness, whichever way it might be.

Let's move on, get to some money market views for the morning. We have Parul Sinha of Standard Chartered Bank who says that the USD-INR continues to trade in a narrow range with local banks accumulating FX reserves at a consistent pace in the 83.40 to 83.60 range. She says local banks absorbed all the month-end FII flows while oil import demand led to a gradual rupee depreciation. She continues to expect the pair to trade in a range of 83.55 to 83.90 in the week ahead. Well, she also weighs in on the bond market. She says that India rates moved lower as draft LCR guidelines released by the RBI led to expectations of increased bond buying by the bank. She says RBI has also released circular notifying new 14-year and 30-year bonds as non-fully accessible route securities, that is non-AR securities, thus limiting the FPI participation in future 14 and 30-year bond issuances which led to steepening of the bond yield curve. 10-year yield this week is going to take cues from global rates and expected to trade between 6.85 and 7% in the near term. All right, well let's just get you some global perspective now. Robert Sockin is with us, he's Global Economist at Citi. Robert, great to have you with us here. Thank you very much for your time. So what has the Fed meeting done for markets incrementally? Has it raised confidence that we will get that 25 basis point cut in September and not just that, that this is perhaps going to be the beginning of a rate cutting cycle? Is there greater confidence after what we heard from Fed Chair last night?

Absolutely, and thanks so much for having me. I think what's always important with these Fed meetings is you get a lot of information about how the Fed is viewing the economy and how the Fed is viewing market pricing. And what we heard from Chair Powell in my view is that he and the rest of the committee are really setting the stage to cut in September. And I would be very surprised given his tone today and the improvement that we've seen so far on inflation if they were not to cut rates once we get to that meeting. So I think that was one very important takeaway. I think another important takeaway is that Powell emphasized that they are focusing on both sides of their mandate. They've seen enough progress on the inflation front to feel that they're getting close to being able to ease policy, but they're also starting to get a little bit concerned about some of the softening they've seen in some of the indicators on the activity and labor market side. The economy has held up well, but the risks of a slowdown I think have risen as rates have been higher. So I think that's the other important takeaway, which putting both of those together, I think really does pave the way for the start of an easing cycle once you get to September. Now it's going to depend on how resilient the economy is and how much inflation improves from here, but I think you're going to get one cut in September and then maybe one or two more cuts this year. And then next year is going to depend on how resilient the economy is and the inflation developments.

Okay, Robert, hi, good morning. So typically when the Fed cuts, everybody parties. Right now the party has been on for a while in anticipation of the September cut. So what's your sense? And the bond market is rejoicing, we saw the 10-year yield fall to about 4%. Stocks are anyway rallying, even gold has been moving higher for other reasons as well. What's the sense? If the cuts start coming in now, then are we looking at elevated asset price levels?

Yeah, I think for these other assets as well, it's going to depend on how resilient the economy is. So in some sense, it's going to depend on why the Fed is cutting rates. Right now, I think what you're seeing priced into markets and what the broader consensus is, is that we are getting some type of a soft landing scenario. Now, as I mentioned, there are some risks that the economy could slow down more, but broadly speaking, the economy has held up well and inflation has continued to improve. So I think that is a very positive environment for equities, and I think you're seeing that priced into markets. So if the Fed enters a cutting cycle and the economy is resilient, that's kind of the best of both worlds for risk. Now, if the Fed starts to cut and the economy slows down more and they have to cut because a recession is ensuing, that's a very different outcome. To me right now, you know, the data are feeling more like a soft landing. Our house base case is that you will get a sharper slowdown in activity, but I think most market participants, I think where you're seeing price in the markets is more of that soft landing flavor, which would be very positive as noted for risk.

Hi Robert, morning and thanks for joining in. Well, you've told us in the past that from the equity markets, India stands out and that was the preference out there as well. I wanted your reading on what the Bank of Japan did. They've slowed their bond buying program and also they went ahead and they cut rates. Implications of this for the time being, the Nikkei is down close to around 3% odd. That was showing signs of coming back, I think it returned to those levels we saw say 30, 40 years ago. So but view on that market as well as implications?

Yeah, absolutely. And you know, this was a difficult central bank to call because what you have seen in Japan is you've seen inflation pressures hold up or pick up relative of course to where they were pre-pandemic. So you know, there has been hope that Japan will be able to sustainably hit its inflation target. At the same time, the currency in Japan was feeling enormous pressure and at times you saw very weak currency levels. And so the question became, you know, was Japanese policy going to respond to the weakness in the currency or were they going to keep rates relatively low for longer to kind of help ensure that they end up hitting that 2% inflation target? And I think what you ended up seeing was that the Bank of Japan was concerned about some of these currency pressures and felt given how high the Fed has been throughout this year that it was time to start raising rates as well. Now, you know, the Fed had cut rates earlier this year, that would have taken pressure off the Bank of Japan to raise rates because I think the currency wouldn't be as weak as it has been. So I think you're seeing the Bank of Japan not only respond to what's been going on in its own economy but what's been happening with Fed policy as well. And I think more rate hikes are coming from Japan given what we've seen come out of that meeting. So very