Week ahead: Risk on party to continue, crude may ease Risk on mode in the global markets is expected to continue after the comments from Janet Yellen. To be noted is that she has not only asserted on continuing with the QE but has also stated that one there is no bubble formation in equity as well as in the real estate markets and also that even if tapering does happen in future the other components of stimulus may continue. In India the focus will now shift toward the state assembly elections and the RBI meeting in December especially after market soothing comments from the RBI Governor, Rajan along with statements from the Finance Minister on the similar lines. The good news is that Onion prices have crashed last week by almost ~35 percent all over India with the coming of fresh harvest into markets – the prices of other vegetables are expected to follow suit. Crude oil may also soften, despite the QE stimulus, because – one, apart from the unexpected crude oil inventory build-up, US has overtaken Saudi Arabia as the world’s largest crude oil producer and thus curbing the import demand of the biggest oil consumer and two, as per NSA “for the first time in many years, we are seeing signs that Irans leadership may be serious about a nuclear deal”. However Libya supply is still an issue. Therefore, in this regard we may see a lower inflation numbers for October or consequently in the near future. The action would continue to be stock specific as the investors would now weigh in the quarterly numbers declared and re-assess the valuation parameters especially the level at which the index is in given the expected uncertainty to prevail as the Lok Sabha elections close in. Some of the out of favour stocks in the recent past, interest rate sensitives like banks and autos--may also find takers especially due to possibility of lower inflation numbers in future. To the disappointment of investors, specifics on reforms were missing in the communique after the Communist Party meeting last week on the reforms in China. These specifics on reforms are expected to be announced this week. Latest GDP numbers from the Eurozone indicate that recovery is a long haul process and therefore one can expect more stimuli from the ECB in future.
Posted on: Sat, 16 Nov 2013 09:58:42 +0000
Trending Topics
Recently Viewed Topics
© 2015