Stimulus stays for the time being

Bernanke said last night that the US Central Bank will continue to pursue an accommodative monetary policy. Translated, it simply means bond purchases will continue so as to continue injecting  liquidity into the economy. As a consequence our markets opened with a gap and posted hefty gains for the day. Bernanke further made it clear that he is not impressd with the present unemployment rate of 7.6% and that he would much rather like to see it at 6.5% for any interest rate action. He said he is somewhat optimistic  But given his position, that's what he has to be. In my previous posts I wrote about the continuation of the stimulus and I stand comlpetely vindicated.on this.

At home our Governor said he is not sure when the Re - USD will  stabilise. Translated, it means the slide is expected to continue. Is the worst  nightrmare ahead of us ?. Further, he is concerned with the Current Account Deficit. Another dampener is our Finance Minister going to US to promote  FDI by US in India.. He has all the reason to do so because India's foreign exchange reserve is fast depleting.

In this situation I think nothing much should be read into today's  gains.. The breadth hasn't been particularly encouraging. At any rate, we are back in result season and as always focus has to be on performance.

Disclosure: I have sold part of my holding in Glenmark Pharma..

Until my next then

Happy investing

Basudev