Contrary to expectations, most of the benchmarks including Indian indices moved higher last week. The Sensex closed 259 points higher at 25,869 and the Nifty closed 95 points higher at 7,857. The terror attacks in Paris did not affect the markets are expected. The Indian markets seemed to make a comeback after three weeks of losses. However, investors may note that the rally wasn’t strong enough for us to conclude that the worst is over. Probably short covering and bargain buying at lower levels made the markets stage a comeback.
Going ahead, this is a holiday shortened week. The markets will be closed on November 25th on account of Guru Nanak Jayanti. November 26th being the last Thursday of the month, will witness the derivatives contracts rolling to expiry. Volatility may be expected from the beginning of the week since traders will be trying to square their positions early since the holiday falls in between.
The Indian stock markets declined last week on negative sentiments despite being Diwali. Bihar election results and bad Q2 results contributed to weak performance of the markets. Renewed selling was seen by FIIs and macro economic data were nothing much to talk about. The markets ended in red at 25,611 (Sensex) and 7762 (Nifty) with a loss of around 2.49%.
Going ahead, fresh negativity has set in after the Friday night’s terror attack on France. The downward trend is likely to continue this week too. Now, all eyes will be on the government and the proceedings of the winter session in the parliament. How the government speeds up reforms measures would be the next trigger in waiting for the bulls to enter the markets. Another factor that may keep the market participants edgy is the fact that the fed rate hike is nearing. Ms Janet Yellen had earlier announced that the Fed may consider hiking the interest rates in December. A rate hike will strengthen the dollar and that will create pressure on other emerging market currencies.
The markets have been sliding for many weeks now and last week too, wasn’t any different. The Indian benchmark indices the Sensex and the Nifty closed at 26,265 and 7,954 respectively. The outcome of Bihar assembly elections will dampen the market sentiments as the BJP suffered a worst defeat. The markets may react with a downward move on Monday morning. However it is also possible that the markets may not respond too much since the downward movements in the last two weeks were probably discounting the Bihar election results.
Going ahead, this week investors would prefer to keep things simple. Markets will be closed on Wednesday and Thursday and hence, trading during the early part of the week is also likely to be lackluster. The events to watch out include – CPI for the month of October, industrial production numbers for September and remaining quarterly results. On the domestic front , the markets will be keen in knowing the reforms measures , especially the progress of the GST and on the international front , the focus will be on the Fed rates . Any fall should be seen as a buying opportunity.
We wish all our readers a very happy diwali.
The rally that was going on stopped last week on fears that the US fed may hike interest rates from December 2015. Ms Janet Yellen had said in the previous FOMC meeting that she will seriously consider hiking the interest rates by December. This remark along with fresh negative cues like weakness in rupee , weak Q2 numbers from many corporates and negative cues from global markets made the Indian benchmarks – Sensex and the Nifty crash by 814 points and 229 points to close at 26,657 and 8,066 respectively. The weakness was evident in all the five sessions last week. Most of the emerging markets indices closed in red as the statement on FOMC meeting was published.
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