This week Nifty surged by 2.69%. I expect the markets to consolidate this week. But, it can be due to reasons like FII buying [in some day of the week FIIs were net buyers], inactivity of FIIs, and expectations on RBI rate cuts.
Even when markets of other major economies corrected due to political tension in South Korea, our markets didn’t.
The November PMI, released by HSBC, stood at 56.5, which has reached its 8 months low as reported in Business Standard. This indicates continuing trouble in our economy.
The RBI has kept the Repo Rates unchanged at 6.5%. The CRR has been reduced to 4% from 4.5%, in order to increase the lending capacity of banks. Further, one notable action by the Governor was increasing the interest rates for NRI deposits. This is expected to be done to protect INR devaluation against the Dollar.
Even now the macro economic factors are unchanged. They are not favorable enough [in short term] to attract FIIs into Indian markets. Experts are of view that, the markets could consolidate between 24,850 and 24,350. If the Nifty breaches 24,350 [ downwards], then the Nifty might decline to 23,950 levels. These are based on technical analysis by experts. Now it is difficult to expect anything from Nifty in the comming week due to uncertainty in the market. The India VIX stood at 14.14 which is down by more than 5%, but still it indicates an uncertain market. But still I expect the markets to consolidate in the comming week.
Gold:
Gold was slightly fluctuating this week. The long term picture of gold is good as per many experts.