More than expected liquidity tightening measures and the increase in saving account rates caused a big sell off yesterday. With the RBI governor signaling possibility of more interest rate hikes in the coming months and a resolve to rein in inflation even at the cost of growth, the upside in equity markets from the present level is capped. The intent and severity of the policy announcements have the potential to derail our entire growth story and consequently the bull market. Impact of these measures on the market as a whole needs to be analyzed before fresh buying.
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