Gautam Chhaochharia, head of midcap research at UBS India says the market should take the recent Cabinet reshuffle
positively. "This is a continuation of the government’s changed
approach towards both reforms as well as administration, which we have
seen over last couple of months," he told CNBC-TV18 in an interview.
Prime Minister Manmohan Singh's imprint on the Sunday reshuffle in the Council of Ministers is evident with several leaders who are in favour of more economic reforms now a part of his new core team.
Chhaochharia believes the reshuffle is likely to provide the much-needed political stability. Going forward, the one near-term data point to watch out for will be the festive season demand, he said.
"Clearly, we have seen over last few months even the consumption sector has been seeing some kind of pressure in terms of consumption demand because of both inflation as well as wage levels. So the festive season will be critical for the broad macro trends and that is an immediate kind of trigger which we would be looking for," he explained.
In terms of monetary easing, Chhaochharia says, a rate cut might happen only towards the end of the year and not on October 30. "If RBI does end up doing something it will be a big surprise for us. It will be quite a presumptive as well as quite a big bet for the RBI to take in our view. We could see some kind of CRR cut, but that anyway for over last one year RBI has been very, very supportive of liquidity unlike the whole of last calendar year."
Prime Minister Manmohan Singh's imprint on the Sunday reshuffle in the Council of Ministers is evident with several leaders who are in favour of more economic reforms now a part of his new core team.
Chhaochharia believes the reshuffle is likely to provide the much-needed political stability. Going forward, the one near-term data point to watch out for will be the festive season demand, he said.
"Clearly, we have seen over last few months even the consumption sector has been seeing some kind of pressure in terms of consumption demand because of both inflation as well as wage levels. So the festive season will be critical for the broad macro trends and that is an immediate kind of trigger which we would be looking for," he explained.
In terms of monetary easing, Chhaochharia says, a rate cut might happen only towards the end of the year and not on October 30. "If RBI does end up doing something it will be a big surprise for us. It will be quite a presumptive as well as quite a big bet for the RBI to take in our view. We could see some kind of CRR cut, but that anyway for over last one year RBI has been very, very supportive of liquidity unlike the whole of last calendar year."
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