Here is a verbatim transcript of Udayan Mukherjee’s analysis on CNBC-TV18. Also watch the accompanying video.

I don’t expect a cyclone in the markets and I hope it doesn’t happen outside the market too because it’s not nice and unseasonal too but the volatility is unseasonal as well because November usually is not such a volatile month. But all indications are that volatility is beginning to subside; things are falling into a groove. Yesterday was the first sign of that and today we might see volatility abate a little bit as well.

I expect a quieter session — maybe the Nifty just tossing around in a 50-point range around that 4,900 mark and the big moves will have to be cued by global markets. Left to us, we will probably not make a bit move after the comeback that is already happened to 4,900.

Outlook on US markets

The S&P 500 is pausing around 1,100 which is its 2009 high and if S&P 500 takes out 1,100 over the next few days and runs higher then the Nifty will be pulled along. If it does not and dithers here and corrects in that range and then Nifty might also keep 4,900-5,000 as a stop of the range and then drift in this zone for a while. There are lots of traders who believe that having seen some resistance around 4,900 or above that the markets might retrace a bit and give up some of its recent gains. It is a possibility but it depends on global markets entirely.

A lot of traders are also watching the Chinese market, it’s becoming a big leading indicator and almost a fail-proof leading indicator of what emerging markets will do. It rallied ahead of all the others and it stopped rallying ahead of all others as well.

If 3,100-3,200 is the top for the Shanghai Index for the moment and the flatness of the last few days is the potent that it will now correct again, one needs to take notice of that too. So answers are not clear and it’s stupid to say that if the S&P moves up, so will we but that is essentially saying nothing but that is how traders are trading nowadays.

GST

It is a white paper and it’s pretty much white because you don’t know what to go on. I know the markets will try and react to it this morning but I don’t know how it is safe to trade on that because essentially you are very low on detail on that paper — the final result could be very different from what you speculate today and work on.

This morning it would be a reasonable corollary from looking at the white paper that assuming that the GST rate will be lower and close to what the former Finance Minister had indicated. then it should be positive for sectors like cement and auto. But there is an ‘if’ and ‘should’ out there, so one doesn’t know. But is it a reasonable premise? I would say it is a reasonable premise that the eventually GST rate will be lower than what kind of taxes sectors like cement and auto end up paying.

The wrinkles come in sectors like tobacco — where you don’t know what will happen, while there will be GST. The Centre will also levy its own excise on top of the GST and it will not come with input tax credit. These have been the favourite milking cows for the governments for a long time.

If the Ad Valorem duty is imposed for tobacco companies, it will be negative, but we don’t know whether it will come. So there is no way to figure out this GST business will be positive to for ITC or not but there are some wrinkles out there in the proposal.