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  • Devangshu Datta - Independent Technical Analyst and Market Expert

    Devangshu Datta

    Independent Technical Analyst and Market Expert

    DATE: September 18, 2015, 12:00 PM

    SUBJECT: US Fed outcome: What next for the markets?




    Hello and welcome to the chat with Devangshu Datta on the road ahead for the market after the US Fed's decision on Thursday to hold the interest rate for now.

  • G


    Which market do you think will bloom in agriculture segment exports?


    Sorry, don't think I know enough to comment on agro exports in general Specific segments like sugar/ cotton seem to be down

  • A


    Why do pt and pd metal rates depend on the US FOMC decisions?


    Hi, generally the international prices are dollar denominated So the prices varies acrroding to USD rate

  • A


    What's your take on the midcap and smallcap stocks for the next 3 years?


    In general, small caps and midcaps should see okay returns over that timeframe. Assuming there is no serious global collapse, internals of Indian economy seem to be ok. Growth shoiuld improve, Smaller scrips tend to give better returns in a growth scenario

  • P


    What do you think is the matter with Rushil Decor? It gained 20% on Sep 14, then fell... today it is up 17%...


    Massive surges in trading volumes - in a small stock with generally low liquidity that causes big time volatility. Again very generally, higher volumes usually asociated with higher prices

  • H


    What in your view will be the effect of the US Fed hike on key rate change by RBI at its coming meeting on Sep 29?


    What hike?? AFAIK Fed is holding, not hiking. I think the RBI will cut the repurchase rate quite soon (maybe out of turn)

  • G


    What would have been the impact on our stock market if the US Fed had increased or decreased interest rate?


    Decrease was almost impossible since it could go into negative territory Increase by Fed might have meant RBI holding. The RBI would watch the difference between the US rates and the Indian rates. A USD hike would have narrowed that difference anyway (just as a RBI cut will now narrow the difference)

  • R


    What is your view of the market at present?


    Long-term - could be a downside till 7300-7400 or lower. Short-term - up until the RBI meet on 29th - could gain a fair amount If the RBI cuts and gives a positive outlook, the outlook could get a lot brigfhter

  • P


    Sir, as we know, if a developed country changes its monetary policy, that affects other economies as well. A rate hike by Fed will also affect the US currency, which has already appreciated. But when the Fed increases its rate, I don't think it will affect India much, because the US is a developed country and India is developing with a good pace. I think FIIs will still invest in India. What is your opinion on this?


    I think this boils down to FIIs assessment of likely return in India versus likely risk - the risk includes currency risk but it is not solely about currency risk. There is a general downgrade of India's growth prospects because the reform expectations have been shelved for the moment - no GST, no labour reform, no land acquisition amendment. Also no clarity on the discrepancies in the new GDP calculations means less trust in growth prospects

  • S


    What are the parameters on which the US Fed will decide whether or not to raise its interest rate?


    I presume when their model of US economic data says it should raise rates They also look at global considerations - they have to - US has exceptional influence on global trade due to the USD being a reserve currency and US itself generating about 20 % of global GDP

  • R


    Dear sir, what will be the future of the Indian stock market after Fed starts increasing interest rates. Major investors in the Indian markets are FIIs. If they started withdrawing money, where will our market settle down?


    Too many variables - China is a big issue for example. Technically, if FIIs pull back, there is good support in that 7400-7500 Nifty zone where the market landed last week (at 7550) and if that 7400-7500 support breaks, there could be a floor at 6800-7000 Nifty (where the mkt was in May 2014). A drop below 6800 would imply that the investor has totally lost faith with the government. That might not happen. Also we have seen Domestic institutions pump over Rs 50,000 crore into equity since Jan 2015 - they can balance off FII withdrawals, to some extent at the least.

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