Besides the second quarter results of India Inc, here are 5 key factors that will determine the market direction over the next couple of months.
Clarity on the geopolitical situation: Markets are likely to remain on the edge over the next few sessions as investors await more clarity on the surging tension between Indo-Pak relations. Though most analysts suggest that the fundamentals continue to remain strong from a long-term perspective, the sudden development has cast a shadow on the diplomatic relations between the two countries in the near-term. Markets, they say, do not like uncertainty and will react sharply to any negative news flow.
RBI Monetary Policy review: The Reserve Bank of India (RBI) will review the Monetary Policy next week – the first under the new governor, Urjit Patel. According to a recent Business Standard poll, the RBI is likely to hold rates steady in its monetary policy review on October 4. The central bank might cut rates by at least 25 basis points (bps) in its December review, since, by then, a clearer picture would emerge on the inflation as well as the economic growth trends. A surprise cut next week, however, could boost market sentiment.
"The forthcoming policy review will be the first one under the 6-member MPC and we would closely watch the views expressed by the 3 external (new) members to gauge its reaction function. Any clarity on MPC’s approach to 4% CPI target by March 2018 would be very welcome," says Kapil Gupta of Edelweiss Securities.
US Presidential Election: Markets are keenly observing the developments regarding the US Presidential election, which analysts say, have the potential to impact market sentiment.
“Election season has now arrived for world financial markets. With opinion polls so seemingly close in the US presidential race, it is clear that markets would prefer Hillary Clinton over Donald Trump, most particularly bond markets,” says Christopher Wood, managing director and equity strategist, CLSA in his weekly note, GREED & fear.
According to a survey findings, Nomura expects the S&P500 to fall more than 3% in immediate reaction to a Trump victory.
“Specifically, and excluding factors other than simply the election result, we would expect equity markets in Hong Kong / China, Korea and the Philippines to be most affected, with India, Singapore and Indonesia in the next grouping, and Thailand and Malaysia falling into the least affected camp,” Nomura says.
Rate hike by the US Fed: The US Federal Reserve (US Fed) kept rates steady in its recent policy review in September. However, analysts say that the US central bank is preparing the markets for a hike in its December policy review, which could see a knee-jerk reaction from the emerging markets and impact flows in the short-term.
"The US Fed is still huffing and puffing, but unwilling to blow anything down. We may get one hike in December, but clearly we are seeing less and less confidence in their ability to normalise much,
Oil Prices: For the first time since 2008, Organisation of Petroleum Exporting Countries (OPEC), agreed to limit production by 700,000 barrels per day (bpd) to between 32.5 million and 33 million barrels of oil per day.
According to Goldman Sachs, the deal should add $7 to $10 to oil prices in the first half of next year. This could be a sentiment dampener for India, which imports nearly 70% of its oil requirements. Moreover, any spike in inflation onn account of a rise in oil prices could hold back RBI from cutting rates.
>>> Nifty Daily Chart <<<
>>> Click the chart to see on full screen <<<Price and RSI may get support from their Support line. Price if moves above 50DMA or 8690 may bring more strength.
>>> Nifty Hourly Chart <<<
>>> Click the chart to see on full screen <<<8550-8600 - Consolidation give lot of meaningful strength from Bulls and RSI. Break below 8540 or support line may bring some correction.
>>> Bank Nifty Daily Chart <<<
>>> Click the chart to see on full screen <<<Bank Nifty also move Just like nifty, may see some more weakness next week also.
>>> Bank Nifty Hourly Chart <<<
>>> Click the chart to see on full screen <<<Price trying get support as did earlier - If holds - Upmove may starts, else fall to continue.
>>> TATASTEEL - Booked Profit Rs.20,000/- <<<
>>> Click the chart to see on full screen <<<Have entered long and Profit Booked on Intraday itself on TataSteel with Rs.20,000/-
>>> Maruti - Booked Profit Rs.15000/- <<<
>>> Click the chart to see on full screen <<<Maruti Profit Booked Rs.15000/-
>>> ADANIPORT - Profit Booked Rs.20,000/- On 27th Sep, 2016 <<<
>>> Click the chart to see on full screen <<<Booked Rs.20,000/- On Adani Port.
>>> Bank Nifty - Profit Booked Rs.21600/- On 26th Sep, 2016 <<<
>>> Click the chart to see on full screen <<<Booked Profit on Bank Nifty Rs.21600/-
>>> Nifty - Profit Booked Rs.7500/- or 100+ Profit - On 27th Sep, 2016 <<<
>>> Click the chart to see on full screen <<<Booked 100+ Points on Nifty @ 27th Sep, 2016.
>>> Nifty - Profit Booked Rs.20,000/- on 29th Sep, 2016 <<<
>>> Click the chart to see on full screen <<<Good Profit on Surgical Strike by Indian Armed forces day, gained 260+ Points.
>>> Performance for the month of September 2016 <<<
Above performance is not a Promise or guarantee for the given Profits or Loss.Performance given based on 1 lot at a time and clients Profit differ as per the margin availability and Number of Lots taken by them. We may or may not re-enter the Calls given here hit Stop Loss, as per market movement. The charts given above are just for educational purpose only and we don't recommend any Entry / Buy or Exit / Sell. Reader must taken their own decision or consult their qualified Analyst before making any decision
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