The government has approved a price hike for diesel, LPG and kerosene. Diesel prices will increase by Rs. 3 a litre and LPG by Rs. 50 more per cylinder. Kerosene prices have been increased by Rs. 2 per litre.
Although everyone would feel the pinch of the Price Hike done but being a stock market investor the policy is in the right direction although would have preferred a much more free pricing with slow hikes all through the year.
The more interesting part from a market angle is that such a decision being passed can be an indication of lots of bills being passed in the monsoon session. Looking at it optimistically Congress may have next 6-9 months for passing reforms as later it would be state elections when it can do nothing.
If the government starts showing some reforms on various policies be it FDI, Infra and so on there could be a change in the attitude.
Will soon look into the possible impact on inflation. But my personal expectation is Crude prices will keep grinding lower and stabilize at current levels of 105-110 brent and 90-95 Nymex or even lower. So possibly this could be the last hike.
Optimistically Crude and commodities fall , Government passes reforms in next 6-9 months, RBI is done with the hikes !! – Interesting time to look for investments on sharp declines provided one has patience and looking towards a 1-2 years horizon.
These are just my personal views and that too with an optimistic bias to it --- Lets wait for things to unfold but one should be alert as i feel strongly next 3-4 months could create many opportunities.