When the mood is uncertain, November
always turns out to be month to watch for. Record FII outflows in October and
then FII’s returned to equity markets in huge numbers in November. Sharp
correction in crude oil prices led to a stronger Rupee, which fell below 70
levels for the first time in three months. We must pay respect where it is due.
Finance ministry did extremely well by letting the Rupee fall with the hike in
crude prices in October. It helped in two ways
– Exchequer didn’t had to bear
the brunt of increase in crude prices as it was passed to consumer
– Further, the weakening of the
Rupee discouraged FII’s sell out… this is one negative attribute they had to
face which didn’t had its precedent. It works well both for economy and Financial
Markets.
Along with these macro indicators, easing
liquidity concerns surrounding NBFCs were also a positive on the domestic
front. Approx. 44000 crore of debt maturity/roll over will be an event to be
watch out.
Globally, lesser severe oil
sanctions imposed on Iran and dovish Fed commentary further improved market
sentiment. Overall, thanks to mix of healthy news flows, the broader markets
ended the month in green.
Going Forward:
Equity Market :
Following will act as triggers for
Equity Market staying in favorable zone:
·
Outcome of State Assembly result will have short
term impact on Markets.
·
Upcoming OPEC discussions and their decision
quantum of Oil production.
·
RBI credit policy in December – though it is
expected to maintain status quo as Rupee seems settling around Rs.70 landmark.
Debt Market:
We should be lucky that a good
mixed Portfolio of AAA and AA+ with investment time horizon of 3 years is
presently yielding around 10% post management Fee. We should have no reason to
park funds elsewhere than Low duration Funds or even Short Term Debt Funds…to
enjoy Post Tax yield of more than 100% in comparison to Bank deposits.
Happy Investing
