The RBI policy is scheduled for 29th September and everyone has taken a 25 basis point rate cut for granted. Let us see what could be the probable outcomes of this meeting.
1. The Governor will announce on coming Tuesday at RBI Half Yearly Policy, the decision on a rate cut. A 25 basis point rate cut has been taken for granted by the markets. The markets will rise if there is a 50 basis point cut or a 25 basis point cut with promises from the Governor of more to come.
2. The Governor may not cut rates but give indications that he is inclined to do so in the future.
3. If there is no rate cut, then the markets will tank immediately. This year the rates have been cut thrice. The first Rate cut was cheered by the markets, it was an unscheduled rate cut. At the time of second rate cut, on announcement the markets made a significant top of 9119 on March 4th which has not yet been broken in past nearly 7 months.
4. In June, when the RBI Governor actually made the announcement on the scheduled today, the markets actually corrected. In a nutshell, the market tends to make a significant top after the RBI meet.
5. Technically, we may in last leg of the down move, with wave 1 correcting 8055 to 7723 = 332 points. Then the 2nd wave up 7723 to 7894 and ongoing. (171 points).
6. The FIIs continued to be strong sellers during the week. Till this trend does not reverse, the market trend will not reverse.
7. After the RBI policy, the next significant event for the markets will be the corporate results after 12th October and then the Bihar election results in early November. Provided the results are favorable for the BJP, then we may be set for the traditional November to February rally in the markets.
1. The Governor will announce on coming Tuesday at RBI Half Yearly Policy, the decision on a rate cut. A 25 basis point rate cut has been taken for granted by the markets. The markets will rise if there is a 50 basis point cut or a 25 basis point cut with promises from the Governor of more to come.
2. The Governor may not cut rates but give indications that he is inclined to do so in the future.
3. If there is no rate cut, then the markets will tank immediately. This year the rates have been cut thrice. The first Rate cut was cheered by the markets, it was an unscheduled rate cut. At the time of second rate cut, on announcement the markets made a significant top of 9119 on March 4th which has not yet been broken in past nearly 7 months.
4. In June, when the RBI Governor actually made the announcement on the scheduled today, the markets actually corrected. In a nutshell, the market tends to make a significant top after the RBI meet.
5. Technically, we may in last leg of the down move, with wave 1 correcting 8055 to 7723 = 332 points. Then the 2nd wave up 7723 to 7894 and ongoing. (171 points).
6. The FIIs continued to be strong sellers during the week. Till this trend does not reverse, the market trend will not reverse.
7. After the RBI policy, the next significant event for the markets will be the corporate results after 12th October and then the Bihar election results in early November. Provided the results are favorable for the BJP, then we may be set for the traditional November to February rally in the markets.
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