Week in Nutshell.

While the indices were flat for the week, the currency depreciated second week in a row. INR has now depreciated 3% in the last 2 weeks. A probable factor could be considerable slowing of FII inflows with the last 2 weeks run rate dropping to INR 3-4 Bn from INR 20-25 Bn over the last 5 weeks. The next trigger is likely to be the RBI meeting due on Oct 30th. In a recent series of interaction with banks, they highlighted their inability to compete with the bond market for high quality corporate lending due to the BASE RATE. So, a RBI rate cut will not only better sentiment towards investments but also braodbase the credit growth away from the retail and housing segment now.