Markets remained volatile during the week. Sensex closed marginally negative over the last week at 14484, losing 0.55%. Similarly, Nifty lost 0.18% to close at 4352. However, many banking stocks ended positively. The Bankex gained 2.33% on account of waning concerns over high inflation, which was reported lower for the second consecutive week at 12.34%. Global equity markets also remained volatile during the week. Crude oil prices corrected around 3.1% in last week and by around 26.8% from the peak of $ 147/barrel (in first week of July) to reach around $ 107/barrel. London Metal Exchange Index (LMEX) tracking the base metal prices also declined by 3.1% in the last week and around 22% from the peak (in first week of Mar’08). Steel prices have also shown signs of softening.

Outlook for the week

The weakness in US economy is evident with various indicators, including increasing jobless claims. Europe is also showing signs of economic slow-down. As a result, commodities prices, including oil are on downtrend.   The declining commodity prices are positive for India, which has still a long way to go in economic, infrastructural development and consumption driven growth. We continue to believe the India growth story is here to stay; though volatility and uncertainty would persist in the short to medium term. ____________________________________________________________________________________________ Debt Market Update      International       Central Bank actions   Bank Action Benchmark interest rate     Previous Current European Central Bank Rate unchanged 4.25% 4.25% Bank of England Rate unchanged 5.00% 5.00% Chile Central Bank Rate increased 7.75% 8.25% Bank of Indonesia Rate increased 9.00% 9.25% Bank of Canada Rate unchanged 3.00% 3.00% Australian Central Bank Rate decreased 7.25% 7.00% .     Source: Bloomberg       Economic indicators     Previous Week Current Week US 10 year benchmark treasury 3.77% 3.56% Crude oil WTI ($/barrel) 116.55 106.90           Source:  Bloomberg        Currency     Previous Week Current Week INR 43.42 44.66 EUR 1.47 1.42 JPY 108.63 105.90               Source: Bloomberg   Domestic   Liquidity   Call rates range Previous Week Current Week MIBOR range 9.77-6.11 9.04-9.39 LAF amount  average (Rs crore) -5731 -11685            Source: Bloomberg   Domestic interest rates     Previous Week Current Week 3 month CP 11.10% 11.15% 91 day T-bill 9.05% 8.95% 5 year OIS