Fate of Bills in house to guide marts

Supported by positive global cues after US Fed statements, short covering and bargain buying at lower levels; markets staged a comeback after three weeks of losses. The Sensex and the Nifty closed 259 points and 95 points higher at 25,869 and 7,857 respectively.

Steps like clearance of FPO of Coal India and IPO of Cochin Shipyard, steps to fast track road projects and incentives to boost exports failed to excite the marketmen. Selling from FIIs continued to be a dampener.

The Seventh Pay commission’s recommendations imply an increase of Rs 1,02,000 crore salary bill for Central government. Though optimistic, analysts say automobile, consumer durables and real estate companies to gain most from the pay hikes; pessimists say the government will find it extremely difficult to hike capital expenditure and also defer its fiscal consolidation road map. With the Winter Session of the Parliament set to begin on November 26, investors will keenly watch the fate of Bills like the GST.

Current geo-political turmoil triggered by Paris terrorist attacks makes forecasting of global markets especially difficult, say analysts. Truncated 4-day trading week coupled with F&O settlement could trigger heightened volatility in the coming week. For the week ahead, chartists predict trading range of 25,300-26,300 and 7,665-8,025. Immediate supports for the indices are at 25,600 and 25,300 and 7,760 and 7,650.   

Next global downturn seems most likely to originate in China, where heavy debt, excessive investment, and population decline may undermine growth. Accumulate quality stocks with medium to long term horizon for gains.

 

 

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