Sunday, May 10, 2015

Will GST be passed in the Rajya Sabha?

The markets ended flat last week but that was only half the story. The first half saw a decline and the end of the week saw the pullback as expected.

1. The Parliament session ends in 3 days and the GST bill is expected to be voted upon in the Rajya Sabha. It has aready been passed in the Lok Sabha. If the Government manages to push it thorugh then it would be a very big sentiment changer and then expect a relief rally to 8500-8600 in the next week itself.

2. The FIIs coninue to sell. The latest reason being given is a slew of IPOs in China and money being diverted there.

3. Globally, the things go into a quiet period of time right now. Once the Parliament closes on Wednesday, there would no major immediate triggers for the marets to fall or rally.

4. The next major trigger would be the monsoons in early June.

5. The bond yields have gone back to almost 8 pc from 7.66 pc. If it goes higher to say 8.2-8.3 pc then one can again look at buying Gilt funds.

6. The corporate results have come and gone. They do not show much promise yet.

7. The Auto car saes showed a decent spike in the month of April. Auto sales are usually an early indicator to show that the economy is picking up.

In a nutshell, we may have made a short term bottom at 7997 and can expect markets to trade with a positive bias in the near term, especially if the GST Bill goes through.

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