The week ahead: Trump’s speech to set the tone..

The Indian stock markets closed the first week of 2017 n a positive note as there was some good news from around the globe and lesser than expected effect of demonetization. The benchmarks – Sensex and the Nifty  - closed 133 and 58 points higher respectively at 26626 and 8186 giving some hope for the investors in the new year.

Going ahead, the main factor that can impact emerging markets including India would be US president-elect Donald trump’s stimulus plans that are expected to kick off more jobs in the US. His policies are likely to take the world economy for a turbulent ride in 2017. One of the most feared factors is the possible rise in fed interest rates that could make the dollar stronger against the Indian rupee. This would mean good times for he export industry but it would also mean lesser foreign investor inflows into the country which will affect the economy in a big way.

The near term direction of the market will also be decided by the upcoming Q3 results, macro-economic data, movement of Dollar against the rupee and international crude oil prices. The short term prospects of Sensex and the Nifty doesn’t look promising and investors need to tread cautiously. The Nifty and the Sensex has strong resistances at 8300 and 27000 respectively due to the presence of 200 day DMA at that point.

The market will be influenced by several other factors also such as the announcement of elections in 5 states  which may result in delay of Budget , timely implementation of GST  and the still unmeasured impact of demonetization.

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