Indian Markets Outlook for the week – 14.Sep.2015 to 18.Sep.2015
(US Fed meeting to dominate market next week)
( www.rupeedesk.in )
All
eyes will be on the US Federal Reserve next week as the central bank is holding
its two-day
monetary
policy meeting on Wednesday to decide on hiking interest rates for the first
time in nearly a decade.
On
Monday, indices will react positively to better-than-expected July industrial
growth data.
However,
volatility is likely to increase as the outcome of the Fed meeting gets closer.
Comments of US Fed officials regarding recent economic data have not given a
clear indication whether a rate hike is imminent.
After
remaining closed on Thursday for Ganesh Chathurthi, domestic equity market will
react to the outcome of the Fed meeting on Friday. On Monday, indices may open
up as India's industrial growth in July came in at 4.2%, higher than estimate
of 3.4%. It was 4.4% a month ago.
Focus
will also be on the headline inflation rate based on the CPI (Combined) for
August, due after market hours on Monday. The headline inflation rate is
expected to fall to a nine-month low of 3.5% in August from 3.78% a month ago
due to statistical effect of a high base.
While
some market participants said the domestic equities could see a knee-jerk
downside reaction next week if Fed hikes rates, others believe that a rate hike
has been factored in and a significant fall is unlikely.
The
most likely scenario is that the Fed will say time for hiking rates is getting
closer. The second most likely scenario is that they will hike by a small
amount and signal that there are more hikes to come. However, a delay in rate
hike by the US Fed to October or December could stall capital inflows in the
country till winter due to the uncertainty over revival in corporate earnings
and the Bihar Assembly elections.
( www.rupeedesk.in )
