The Asian markets are seen trading positive on the back of Spain`s bank bailout, while sentiment was also boosted with Chinese economic data that was not as bad as some had feared. Spain secured a -100 billion (USD 125 billion) loan to bolster its banking system, which helps the fourth and largest euro-zone economy to be rescued by its euro-zone partners. The Chinese data released during the weekend was mixed, inflation, industrial production and retail sales all disappointing but imports and exports rising sharply.
The market players are expecting a rate cut by the central bank in the up-coming monetary policy review. The expectations are high on the back of GDP growth for the fourth quarter 2011-12 coming in at 5.3%, a nine year low. China reducing interest rate last week by 25bps to boost growth expectations is another factor speculating rate cuts by the RBI. RBI had cut the repo rate by 50bps in April 2012. But inflation remains a concern above 7% still.
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