Manish Singh, Chief Strategist & Head of Investments, Crossbridge Capital LLP says inflation and financial condition are two key parameters that Fed is watching closely.
The US Federal Reserve, in an unscheduled meeting today, is expected to discuss the possibility of rate hike in its scheduled meeting on December 16.
Manish Singh, Chief Strategist & Head of Investments, Crossbridge Capital LLP says that there is “no burning reason” for Fed to hike rate at present and that the meeting today will not be of much consequence. The two key parameters that Fed looks at are inflation and financial conditions, he adds.
Agreeing to the above sentiment, Dharmesh Kant, Strategist at India Nivesh Securities says that Fed might not raise in December.
On the current market situation, Kant says that the market has corrected and going forward, certain positives will drive the market higher.
Speaking with CNBC-TV18, Kant says positives like base affect, government initiatives and the upcoming Parliament Session will help lift market sentiments.
On commodities, Singh says a strong dollar will be a negative for the unstable commodities. Singh, however, is bullish on equities. Kant doesn’t have a long-term view on metals, but is bullish on sectors like banking, financials, cement and infrastructure.
Below is the transcript of Dharmesh Kant's interview with CNBC-TV18's Surabhi Upadhyay.
Q: What a quiet start to the week. Given that so many events are lined up were you taken by surprise at all?
Kant: There was no surprise. This is a shortened week with F&O expiry coming on Thursday and Wednesday being a holiday. So, this was more or less expected Monday being a quiet day. I think the markets are poised for expiry around 7900 kind of levels. So, not much of activity is expected in the market as of now.
Q: We have been in this range for a while now, it has been several weeks, you are expecting this rangebound trade to continue or do you expect a breakout?
Kant: What we are expecting is definitely a breakout going forward. If you notice the market from 2009 to 2010 December, that was a one way rally as a build up to the election and post Congress came to power there were three circuits. The entire year 2011 was more of a washout year, it was a down year.
Similarly around 2013 July the market started picking up, rally went up to January 2015. Then again on a monthly closing basis I think 8952 was the January closing, which is the highest in this year so far and we are down around 1200 points on Nifty as of now. So, the correction has happened and now all the positives have to play out.
Q: It is very common knowledge that no one is really expecting any great fireworks from the winter session of the parliament which kicks off on the 26th November. Are those sort of negatives priced in? and if they are priced in, what are the positives that you just referred to?
Kant: Going typically by any parliament session, normally the market remains choppy and volatile and the sentiments are very high, the remarks of what is being made in the parliament is very high. So, I think this volatility will be there.
The positives which I was talking about is not to forget that when we come into the numbers in January, we will a good base effect, because December last year was a bad earnings quarter, so that will come into play and a lot of initiatives which have been taken by the government are favourable. Even if the parliament session is more or less neutral, so that would be the big positive for the market.