The week gone by was tremendous for the stock markets, especially since Wednesday, when Fed announced 50 basis point cut. Since then, the only way markets are going is only UP. Sensex is almost touching 17000 mark and Nifty is just 150 points away from magical 5000 mark.
Now, the million dollar question is how the current week will go? Will we see another week of resurgence in the stock markets? Or, will we see markets go into corrective mood to book some profits? Well, the fact is nobody is ready to predict on it. Hence, the word that can rightly align with the coming week is “volatility”.
Now, the million dollar question is how the current week will go? Will we see another week of resurgence in the stock markets? Or, will we see markets go into corrective mood to book some profits? Well, the fact is nobody is ready to predict on it. Hence, the word that can rightly align with the coming week is “volatility”.
The last few weeks had touched almost every nerve of the stock markets. July was the month of euphoria in terms of liquidity. Then came August and we saw the sub-prime taking away all the gains made in July. Then came September and every investor was watching Fed like an Avid cricket fan watching the last ball of India-Pakistan match. Somehow, it seems that markets are looking for cues that can give them the direction for the future. And till, this scenario persists, we will only see volatility arising every now and then.
The major factor that can influence the Indian stock market this week is the “F&O expiry”. Markets may remain strong till Wednesday and can go into serious corrective mood from then on. And hence, it is advised to keep 60% of your money in stocks and 40% in cash.
Another major concern is the “Hot money” that is coming into the Indian stock markets. We all know how this money goes out as quickly as it enters into the markets. The way stocks have moved up after Fed announcement is really astonishing. RBI must be thinking of its relevance in Indian markets, since the news on interest rates increase didn’t impact the markets so much than what the impact cut rates reduced by Fed has made in Indian stock markets. Man!! What am I doing in Indian stock markets?
Ok… cutting things short, let’s see some factors that can influence the Indian stock markets this week:
1) F&O Expiry – as discussed above, F&O expiry is expected to bring volatility in the markets, as positions start squaring off. Watch out friends!! Especially those stocks which are present in F&O and have run quite a bit last week.
2) Liquidity – it could be interesting to watch whether the inflows into the stock markets will be as strong as the last week or not. The gut feeling is it will persist, since huge chunk of money was waiting due to fed announcement and it will now be raring to enter into the stock market.
3) Currency fluctuation – Rupee has moved up against dollar and surely it will have an impact on technology stocks, textiles, and other export oriented industries. Stay away from such stocks friends!!!
Well, before I finish this article, I would like to share some of my concerns.
The major factor that can influence the Indian stock market this week is the “F&O expiry”. Markets may remain strong till Wednesday and can go into serious corrective mood from then on. And hence, it is advised to keep 60% of your money in stocks and 40% in cash.
Another major concern is the “Hot money” that is coming into the Indian stock markets. We all know how this money goes out as quickly as it enters into the markets. The way stocks have moved up after Fed announcement is really astonishing. RBI must be thinking of its relevance in Indian markets, since the news on interest rates increase didn’t impact the markets so much than what the impact cut rates reduced by Fed has made in Indian stock markets. Man!! What am I doing in Indian stock markets?
Ok… cutting things short, let’s see some factors that can influence the Indian stock markets this week:
1) F&O Expiry – as discussed above, F&O expiry is expected to bring volatility in the markets, as positions start squaring off. Watch out friends!! Especially those stocks which are present in F&O and have run quite a bit last week.
2) Liquidity – it could be interesting to watch whether the inflows into the stock markets will be as strong as the last week or not. The gut feeling is it will persist, since huge chunk of money was waiting due to fed announcement and it will now be raring to enter into the stock market.
3) Currency fluctuation – Rupee has moved up against dollar and surely it will have an impact on technology stocks, textiles, and other export oriented industries. Stay away from such stocks friends!!!
Well, before I finish this article, I would like to share some of my concerns.
Why Federal Reserve news has so much bearing on Indian stock markets? What would have been the scenario if fed announced just 25 basis point cut – a free fall? Will there be a significant impact on Indian industries from fed cut or no iut?
Retail investor is an innocent and honest chap!! He doesn’t understand economy much. You can see him scratching his head if asked about Fed-Indian economy co-relation. Still, every stock market follower will tell you that Fed is going to meet on 18th September and will impact the Indian stock markets. And he will only pray that Fed take the step what markets want it to take.
This time around!!! It seems God has listened to his prayers. But will almighty keep saving him from such factors? Only my and your god knows and it is better to leave our destiny in his hands...
Ameen!!!!
Wish you all a very happy investing!!!
Retail investor is an innocent and honest chap!! He doesn’t understand economy much. You can see him scratching his head if asked about Fed-Indian economy co-relation. Still, every stock market follower will tell you that Fed is going to meet on 18th September and will impact the Indian stock markets. And he will only pray that Fed take the step what markets want it to take.
This time around!!! It seems God has listened to his prayers. But will almighty keep saving him from such factors? Only my and your god knows and it is better to leave our destiny in his hands...
Ameen!!!!
Wish you all a very happy investing!!!
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