Wow. Only hours after China’s announcement, India joins the bandwagon for stimulus.
From Bloomberg,
Indian stocks climbed to the highest level in a month after Prime Minister Manmohan Singh pledged to revive growth in Asia’s third-largest economy.
ICICI Bank Ltd. (ICICIBC), the nation’s second-biggest lender, paced gains among its peers.Reliance Industries Ltd. (RIL), owner of the world’s largest oil-refining complex, rose to a four-week high after Chairman Mukesh Ambani unveiled plans to plans to invest 1 trillion rupees ($18 billion) over five years to double its operating profit. The BSE India Sensitive Index (SENSEX)advanced 1.2 percent to 16,649.05, its highest close since May 7, bound for its best week this year with a 4.3 percent gain.
India’s Singh yesterday outlined port, railways and road projects and a push to add power-generation capacity to bolster the economy. The government’s pledge follows the central bank’s signal to cut borrowing costs to support an economy expanding at the weakest pace in almost a decade as policy gridlock deters investment and Europe’s debt crisis hampers exports.
“From a very low level of confidence there’s now hope that things will happen,” Hitesh Zaveri, head of investments of portfolio management services at Mumbai-based Birla Sun Life Asset Management Co., said in a phone interview. “There’s expectation of a stimulus coming from Europe and of a rate cut locally. That forced short-sellers to cover their bets.”
Stimulus really does nothing but to juice up the markets over the short term at the expense of redistributing wealth from taxpayers to the bankers and cronies, as well as, fueling boom bust cycles which is negative for any economy over the long term.
Again promises are one thing, actions are another.
The US Federal Reserve’s FOMC will meet on June 19-20th, will they be next?
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