In India, investors would be keenly looking at the WPI data on December 16th after a 9 month high CPI figures for November were released this week. WPI as obvious is not expected to give any respite in terms of RBI continuing with its hawkish monetary stance in its meeting.
By Aviral Gupta The markets would tread cautiously waiting for how the two key events this week unfold – FOMC meeting on December 17-18 and RBI meeting on December 18th. A survey on December 7th after the U.S. non-farm payroll data for November, conducted by Bloomberg on 35 economists concluded that 34 percent of economists surveyed believed that tapering would start in December meeting, an increase from 17 percent in a November 8th survey. In November, 53 percent predicted a tapering in March, compared with 40 percent in December poll. Markets are better prepared this time for tapering compared to the earlier indications which were shocker. As expected, the rupee is clawing down on fears of tapering but due to improved CAD situation, a Reuters poll suggests that median expectation from 20 strategists is for the rupee to trade at 63 against the dollar at the end of February. The currency is unlikely to weaken to the record low levels seen in August. It is then seen weakening further to 64 rupees per dollar by May before the general elections. In India, investors would be keenly looking at the WPI data on December 16th after a 9 month high CPI figures for November were released this week. WPI as obvious is not expected to give any respite in terms of RBI continuing with its hawkish monetary stance in its meeting. Strong buzz prevailing in Delhi's Lutyens that the polls may be preponed as the ruling party doesn’t want to get things worse from here. The indicator to that would be if the ongoing parliamentary winter session is extended. From here to general elections, markets are expected to drift lower while having a tendency of being range-bound implying low volatility with slow downward grind. The defensives would again be in reckoning. Investors should focus on sectors like IT, Pharma which are deriving their revenues from overseas developed markets which are recovering slowly but steadily. Metal pack, where the pricing is governed by the stabilising China should also be kept in mind. A buoyant rural economy would also be a good investment theme putting sectors like FMCG, 2 Wheelers, Tractors etc. in the focus. This should be basically the investment theme till the elections, which are barely 5 months away, are held. In the Eurozone, Germany would be in focus as it releases its ZEW and IFO business surveys. China would be releasing its HSBC Manufacturing PMI on Monday.
By Aviral Gupta The markets would tread cautiously waiting for how the two key events this week unfold – FOMC meeting on December 17-18 and RBI meeting on December 18th. A survey on December 7th after the U.S. non-farm payroll data for November, conducted by Bloomberg on 35 economists concluded that 34 percent of economists surveyed believed that tapering would start in December meeting, an increase from 17 percent in a November 8th survey. In November, 53 percent predicted a tapering in March, compared with 40 percent in December poll. Markets are better prepared this time for tapering compared to the earlier indications which were shocker. As expected, the rupee is clawing down on fears of tapering but due to improved CAD situation, a Reuters poll suggests that median expectation from 20 strategists is for the rupee to trade at 63 against the dollar at the end of February. The currency is unlikely to weaken to the record low levels seen in August. It is then seen weakening further to 64 rupees per dollar by May before the general elections. In India, investors would be keenly looking at the WPI data on December 16th after a 9 month high CPI figures for November were released this week. WPI as obvious is not expected to give any respite in terms of RBI continuing with its hawkish monetary stance in its meeting. Strong buzz prevailing in Delhi's Lutyens that the polls may be preponed as the ruling party doesn’t want to get things worse from here. The indicator to that would be if the ongoing parliamentary winter session is extended. From here to general elections, markets are expected to drift lower while having a tendency of being range-bound implying low volatility with slow downward grind. The defensives would again be in reckoning. Investors should focus on sectors like IT, Pharma which are deriving their revenues from overseas developed markets which are recovering slowly but steadily. Metal pack, where the pricing is governed by the stabilising China should also be kept in mind. A buoyant rural economy would also be a good investment theme putting sectors like FMCG, 2 Wheelers, Tractors etc. in the focus. This should be basically the investment theme till the elections, which are barely 5 months away, are held. In the Eurozone, Germany would be in focus as it releases its ZEW and IFO business surveys. China would be releasing its HSBC Manufacturing PMI on Monday.
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