Prices set to rise further as rupee touches the 90 mark

Macro picture may not be affected much, as fuel prices are regulated by the govt, but individual prices of specific services or goods will rise

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aces one of the highest tariffs relative to other countries at 50%.

It is another issue that any deal with the USA will necessarily mean some give and take, where here will be the contentious issue of agriculture and dairy that has to be sorted out in the form of imports from the USA.

The second has been the erratic behaviour of the FPIs. They have been in the withdrawal mode on he equity side. In September, they were sellers but became buyers in October and sellers in November and the first few days of December. This is notwithstanding he fact that corporate India has posted fairly good results for Q2. There are several reasons here. First, the quantum of investable funds tends to change with time and is spread over markets as funds reallocate their investments. Second, the Indian market may be overvalued in the sense that prices may be much higher than the ideal rule of thumb of a PE of 20, where he upside is limited. Third, while he Sensex and NIFTY rose by around 8% on an annual basis, other markets have done substantially better, thus leading to this reallocation. Last, as this is December, when they normally close their accounts, there is a tendency to book profits where they think gains are maximum (due to the overvaluation). Therefore, such selling activity is not prevalent in other markets but in India.