Rajeev Malik, Asia Economic Research, JP Morgan Chase Bank said that Fed is likely to cut rates by 25 bps in Sep 18 meeting and Fed may cut rates once more after September meet. Any rate cut by the Fed would be an emergency measure and not trend change and that he wouldn't be surprised to see Fed hike rates once more in Q2CY08.

About the political situation in India, he said that the political situation in India will be the dominant theme and India is structurally firm despite political uncertainty. The political situation may not impact the near-term growth numbers. Also, the old FIIs in India may remain unfazed by the current political uncertainty. The near term volatility to be seen as buying opportunity, he believes. The political issues upsets momemtum in market, but the seasoned investors may buy, he advised. The current govt may want to present budget by end of Feb.

The ECB moves and the political moves may affect the momentum of flows into India and RBI may reverse its recent tightening measures later in the year, he finally said.

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