Today, we expect a cautious start as most global markets are in the red. We have two back-to-back extended weekends. The bulls are indeed on seventh heaven as the September series came to a happy close with a 7% gain in the major indices. Foreign funds continue to pour money into Indian equities while the local funds don’t appear to be all that excited. The market is likely to remain sideways with mostly a positive bias and its direction will hinge on FII inflows and external environment. Results and RBI’s monetary policy are the two big events to watch out for next month.
Meanwhile, inflation is slowly making its way back, with WPI inflation climbing more than expected. Consumer prices are much higher. Inflation is considered bad for equities as it hurts consumer spending and erodes corporate profitability. But for an economy like India 4-5% inflation should not be a big issue. For the time being it may not have a major impact on market sentiment. This has the potential to make the market choppy but also gives you a chance to relax.
Meanwhile, inflation is slowly making its way back, with WPI inflation climbing more than expected. Consumer prices are much higher. Inflation is considered bad for equities as it hurts consumer spending and erodes corporate profitability. But for an economy like India 4-5% inflation should not be a big issue. For the time being it may not have a major impact on market sentiment. This has the potential to make the market choppy but also gives you a chance to relax.
