2021-10-31 09:06:25
Things to watch in November month
Most of investors are in fear due to increased volatility in October month. And everyone wants to know what is going to happen next. I would like to answer in very simple way so you can understand easily. Let start with the major events ahead which can drive the market in November month.
1) Fed meeting: Federal reserve will publish its monetary policy minute on 3rd November. Fed is likely to announce reducing of bond purchasing from 120 billion dollar per month. But market has already factored in the tapering and more focus will be on comment from Fed on inflation. In views of many experts, inflation is out of control of fed and they are expecting boom in inflation will force Fed to start increasing rates from mid of 2022 which is earlier from previous expected date. If Fed will give any hint that interest rate will be increased sooner then we will see increasing volatility in Indian market along with global markets. In short, focus must be what Fed says about inflation and don't have to worry about reducing bond purchasing.
2) Debt ceiling increasing discussion in US: In US, debt ceiling discussion again is expected to haunt stock market because if policymakers couldn't reach to deal increasing debt ceiling then there is danger of US government shutdown from Mid December. This is nothing new and it happened in 2018 December for 35 days. So, traders don't have to worry much but at the same time don't expect upside movement too.
3) Crude oil price: Crude is very crucial for Indian market as it drives inflation. If inflation goes rising further RBI will be forced to start increasing interest rate, which will drive Indian stock market to fall. Increasing crude and gas price will push input cost for many industry, causing margin pressure. In recent result updates from companies margin pressure has come out as concern.
4) USD movement: USD in recent days have gone up in the hope of tapering announcement in US. If USD rate increases further we will see more selling from FIIs. And downward movement in USD will push Indian market up.
5)Festive season demand: We have to watch data like inflation, PMI, sales from auto companies, and updates from companies showing how demand is strong due to festive season.
My take: Though there is volatility we have experienced in Indian market in late October, overall sentiment is still bullish and this is best time to buy stocks which are available at discount of 15-30 percent. There is no recession coming in next 18-24 months so major correction won't happen. Choose quality stocks only and avoid high beta counters and penny stocks.
Regards
Kaushal K Singh
Stock Shiksha
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