Indian Market Likely To Consolidate

Indian equities remained strong in the preceding week and managed to break previous all time high levels. It was yet another week which saw key benchmark indices broke previous records and finally capture the milestone of 28,000 level due to encouraging macro data’s and FIIs inflows.

Both, Sensex and Nifty was up by 0.63% in the week, Sensex was up by 178.03 and closed at 28,046.66 points whereas Nifty also gained 52.90 points to conclude at 8,389.90, after crossing the psychological 8,400 level during the week. BSE mid-cap and BSE small-cap indices jumped 0.90% and 1.55% respectively this week.

FIIs have bought shares worth a net Rs 7590.64 crore in November 2014 so far and they have bought shares worth net Rs 92460.79crore in this calendar year so far. The positive factors like fall in CPI and WPI inflation along with rebound in Industrial production growth bolstered the market sentiment amid hope of RBI opting for early rate cut which is scheduled to announce its fifth bi-monthly monetary policy statement on December 2. It has so far maintained tight money policy to controlled inflation.

Markets would also eye the month-long winter session of Parliament that will start on November 24 and end on December 23. India is set to unveil a slew of reform measures in the coming weeks, the government is hopeful that it would be able to get the Insurance Bill passed, which seeks to raise the cap on foreign direct investment (FDI) in insurance from 26% to 49%, and the Land Acquisition and Rehabilitation and Resettlement Bill. Another priority is the revised Goods and Services Tax (GST) Constitution Amendment Bill, which has been delayed due to lack of consensus among the states. Also on the anvil are plans to trim government’s equity in state-owned banks to 52% and a disinvestment agenda laying down the schedule to sell the Centre’s stake in public sector undertakings (PSUs).

Globally, The U.S. stock market went more or less flat on Friday but a fourth straight week of gains marked the best four-week period for the market since December 2011. The Dow rising 0.3% for the week and the S&P 500 advancing 0.4% while the Nasdaq climbing 1.2%. The US Federal Reserve would on Wednesday release minutes of its October policy meeting.

Gold price may shoot-up due to the “save our Swiss gold” initiative in Switzerland where people’s vote will decide whether the Swiss National Bank (SNB) may be required to beef up its gold reserves from 7% to 20%. The Alpine country will vote on November 30, 2014 can be a game changing one for the gold market globally. Indian Jewelers’ expect if Switzerland votes in favors of beefing up the gold reserves, the local price would also sharply move up.

Tokyo stocks fell more than one per cent in early trade Monday after official data showed Japan's economy dropped into a recession, missing expectations for a positive figure and dealing a huge blow to Tokyo's growth target. Starting on Monday (Today), investors anywhere in the world able to purchase shares of companies listed on the Shanghai Stock Exchange. It's yet another sign that China is opening up its economy.

In absence of any major domestic factors, stock markets would track global cues, investment by overseas investors, movement of rupee against the dollar and crude oil price. SGX Nifty is trading in green with of 6.5 points up. We are of the opinion that Indian equities are likely to open on a positive note and going forward may see consolidation in the current week.