A new governor has been placed so the panic that was created by the resignation of Mr. Patel can now be ignored. Therefore the reason for RBI to sell aggressively like yesterday does not perhaps exist today. On the other hand the fact that the ruling party has lost in state elections resulted in almost large FPI outflow yesterday and could be the reason for further weakness in INR. NDF 1 m is 6.5p right while 1 year is almost 50p right which indicates substantial offshore buying pressure. Oil looks weaker as prices are still trading in the 60-61 range in spite of the production cuts last week, but markets are not looking at that currently. We can expect more negative news on US-China trade talks or on Brexit which can in general hurt risk sentiments. CMP 72.12, Range 71.95-72.45. I would wait till end of this week to form a medium term view.
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