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'Market ignores positive action like rate cuts'

Rate cuts by RBI usually trigger bullish tendencies but this time the capital market ignored the positive development despite the fact that there were signs of economic recovery, ICICI Prudential's Deputy Managing Director Nilesh Shah said.

business Updated: Mar 08, 2009 11:56 IST

Rate cuts by RBI usually trigger bullish tendencies but this time the capital market ignored the positive development despite the fact that there were signs of economic recovery, an expert said on Sunday.

"We have reasonably okay fundamentals...There are signs of recovery in some sectors, yet the mood in the market to a positive action like the rate cuts by RBI is to ignore it as sentiments are bad," ICICI Prudential's Deputy Managing Director, Nilesh Shah, told PTI.

Last week, the apex bank cut by 0.5 per cent, its key short-term repo and reverse repo rates through which RBI lends and borrows overnight funds to banks, sending signals of further lending rate cuts particularly in home, auto and other consumer loans to boost growth.

Giving a snapshot of the equity market, Shah said the economic scenario was not all that bad in India but due to global recession the overall sentiments were bad. In such a scenario, positive developments see no visible reactito be better than the previous quarter, he said, adding in January and February this year some of the sectors like cement, steel, retail and auto have done well indicating an economic recovery.