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June 01, 2006 18:30 IST
Though the Indian markets ended the month of May on a weak note tracking global cues such as volatile commodity prices and concerns over rising interest rates in the US, a latest report by Standard & Poor does not expect further rate hikes in the coming months.
The global equity research firm said in its weekly market analysis newsletter that investors' concern over commodity prices are overblown, while no fresh rate hikes are likely in the coming months.
The expectations for further rate hikes have been a major trigger for the huge FII selling over the past few weeks. FIIs are estimated to have sold off more than $2 billion since May 11, the day domestic market began its downslide.
S&P said it believes the US Federal Reserve is now in a wait and watch mode, with no new rate hikes planned for the coming months.
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