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October to continue lending support to Equities and OIL (on the back of stronger expected economic recovery reflected in equities strength), Current week/fortnight to be the most crucial and exiting period to be watch out for in 2009.
November: Toughest period to be in equities (not because it will fall, but because it will be extremely choppy, volatile, and trade sideways and with 80-85% of our daily turnover coming from F&O segment, November is not the month to be equities), USD to slip further, GOLD, Bond prices to rise, Indian Rupee to strengthen further during November.
Markets in my expectation will continue to move higher during October in between continued sideways movement and volatilities due to two reasons. One because of much better than expected earnings reported by US financials, technology, healthcare majors in next two weeks and continued good news on jobs front, retail sales, lower delinquencies, higher mortgage application on the back of continued lower mortgage rates, manufacturing data etc. And on the back of all these news, I also expect OIL to make newer highs during this period.
Global markets (including Indian Markets) will continue to look for cues from US earning season to move sideways with positive bias (with pop-ups to positive side occasionally). The strength in broader markets on the back of global news flow will continue to support stocks, which will be reporting Earnings back in our markets.
November in my expectation will be toughest period to be in the market. I do not expect the markets to fall significantly, but, yes, I expect the market to become choppy, volatile and move sideways, due to end of earnings season, increased focus towards debate over reverse in policies by central bankers all around the globe and on Inflation. Even this choppiness and sideways movement might have positive bias occasionally due to positive macro data continuing to come out of west to support economic recovery in developed world.
I expect USD to slip further during November on the back of debate getting stronger on US Federal Reserve becoming laggard in reversing policy regarding quantitative easing and Interest rates. This might make debate over search for safe heavens to take centre-stage, which might bring GOLD and Treasuries (higher bond prices) into limelight during this period. I also expect the Rupee to reach newer highs during this period, on the back of weakening USD, which could also strengthen on the back of stronger economic data coming out of India and RBI’s statement during its monetary policy.