The money and equity markets were abuzz with talk of the central bank hiking cash reserve ratio to impound excess liquidity in the economy and, in turn, containing inflationary expectations.
Concerns over a slowdown in India's economic growth is likely to keep foreign institutional investors off equities, dealers said. The FIIs net sold shares worth $879.1 million so far this month.
The growth momentum has been slowing down mainly on account of a steady rise in interest rates, high crude oil prices and global uncertainties. Most analysts see the economy growing at 8.00 per cent or below in 2008-09, compared with 9.00 per cent in the previous year. However, the RBI expects the gross domestic product to grow at 8.0-8.5 per cent.
"In India, the fundamental drivers of growth continue to be strong. Subject to monsoon conditions being normal, the GDP growth is expected to be in the range of 8.0-8.5 per cent, as anticipated," the RBI Governor YV Reddy said.
Oil marketing cos: Negative stance
The shares of state-run oil refinery-cum-marketing companies (OMCs) are likely to remain in the negative next week despite the government's compensation package as crude oil prices remain firm. Benchmark crude contract for July delivery on the New York Mercantile Exchange was today trading at over $131 a barrel.
Analysts said the compensation package announced by government was not enough to fully cover oil marketing companies' losses. The bailout package
