MUMBAI: Equities are seen chalking up gains in the coming week as market participants expect the US Federal Reserve to cut interest rates at their next meeting mid December.
“We are looking at a rally across emerging markets, with strong performance from India, ahead of the Fed meeting as we expect the US central bank to lower rates. However, with the uncertainty in the US economy, our market could also be volatile, but the bias is definitely positive,” said Amitabh Chakraborty, president (equity) at Religare Securities.
The Beige Book report which released last Wednesday, showed the US economy continued to grow, but at a reduced pace. Fed officials, who until their last FOMC meet stated that keeping inflation in check was of more importance than the economy’s growth rate, also hinted toward cutting rates at their next meeting, depending upon a series of economic data which will be released in the interim period.
Late on Thursday, Fed Chairman Ben Bernanke said financial market pressures have taken its toll on the economic outlook and the central bank needs to be exceptionally alert in handling the situation.
Despite discouraging stats on the housing market, jobless claims and consumer confidence, US stocks spurted up on Thursday as the data pointed towards greater chances of a rate cut.
Asian markets, including India, extended the rally. On Friday, the Bombay Stock Exchange’s Sensex ended up 359.93 points or 1.89 per cent at 19,363.19. National Stock Exchange's Nifty closed at 5762.75, up 128.15 points or 2.27 per cent. In the last week of November, both Sensex and Nifty were 2.7 per cent higher.
The month saw better performance from the mid- and small-cap space as opposed the frontline shares. During this period, funds from overseas investors, which generally fancy the large-cap section of the market, have declined. According to SEBI data, FII net sales crossed Rs 4000 crore in equity. As a result, the Sensex and Nifty lost over 2 per cent. But the BSE Mid-cap and CNX Mid-cap increased by 5 per cent and 7 per cent, respectively.
According to Religare’s Chakraborty, next week’s rally will be driven by select shares from the mid-cap space. “Going by the November series rollovers, scrips like IFCI, Essar Oil, Reliance Petroleum, Sterlite Industries Adlabs and GMR have room for further upside in December,” he said.
Source - The Economic Times
“We are looking at a rally across emerging markets, with strong performance from India, ahead of the Fed meeting as we expect the US central bank to lower rates. However, with the uncertainty in the US economy, our market could also be volatile, but the bias is definitely positive,” said Amitabh Chakraborty, president (equity) at Religare Securities.
The Beige Book report which released last Wednesday, showed the US economy continued to grow, but at a reduced pace. Fed officials, who until their last FOMC meet stated that keeping inflation in check was of more importance than the economy’s growth rate, also hinted toward cutting rates at their next meeting, depending upon a series of economic data which will be released in the interim period.
Late on Thursday, Fed Chairman Ben Bernanke said financial market pressures have taken its toll on the economic outlook and the central bank needs to be exceptionally alert in handling the situation.
Despite discouraging stats on the housing market, jobless claims and consumer confidence, US stocks spurted up on Thursday as the data pointed towards greater chances of a rate cut.
Asian markets, including India, extended the rally. On Friday, the Bombay Stock Exchange’s Sensex ended up 359.93 points or 1.89 per cent at 19,363.19. National Stock Exchange's Nifty closed at 5762.75, up 128.15 points or 2.27 per cent. In the last week of November, both Sensex and Nifty were 2.7 per cent higher.
The month saw better performance from the mid- and small-cap space as opposed the frontline shares. During this period, funds from overseas investors, which generally fancy the large-cap section of the market, have declined. According to SEBI data, FII net sales crossed Rs 4000 crore in equity. As a result, the Sensex and Nifty lost over 2 per cent. But the BSE Mid-cap and CNX Mid-cap increased by 5 per cent and 7 per cent, respectively.
According to Religare’s Chakraborty, next week’s rally will be driven by select shares from the mid-cap space. “Going by the November series rollovers, scrips like IFCI, Essar Oil, Reliance Petroleum, Sterlite Industries Adlabs and GMR have room for further upside in December,” he said.
Source - The Economic Times
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