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: Economy

The RBI has finally begun to withdraw from an accommodative monetary policy, citing inflation expectations, but kept unchanged the soft interest rates. The balancing act by RBI governor D Subbarao included raising the percentage of deposits that banks compulsorily park with it to 25%-a 100-basis point rise. To prevent an asset bubble in the commercial real estate sector, it has asked banks to set aside more funds as cover for loans.

Politics

Urging Islamabad to destroy terror groups operating from its territory, PM Manmohan Singh said on October 28 that if Pakistan showed “sincerity and good faith,” India “will not be found wanting in (its) response.” Inaugurating the Anantnag-Qazigund rail link here, Singh underlined that terrorists “want permanent enmity to prevail between the two countries” but made no reference to the 26/11 attacks or militancy in Kashmir.

Markets

The country’s equity indices ended the week on a negative note with second quarter results, intense selling from FIIs and weak cues from global markets failing to cheer them, dampening the excitement over the US coming out of deep recession. The 30-share Sensex of the BSE lost 914 points or 5.44% during the week. On Friday, the Sensex was down by 156.44 points or 0.97% to close the day at 15,896.28 points.

International