Trump’s plan to cut taxes seems to be going through and soon it is likely to become law. On top of it reports suggest that a $1 trillion infrastructure revamp draft would be released before 30th Jan 2018. Brexit phase 1 talks getting through also is a shot in the arm for global risk sentiments. In the larger scheme of things a 0.3% or 0.2% average earnings growth doesn’t make too much of a difference. This week we have the FOMC where rate hike is given but what the market would watch out for are the forecasts on inflation for 2018 and 2019. Some analysts have already started projecting 3 and even 4 rate hikes next year which looks possible to me given the current sentiments.
USDINR 1m NDF is trading flat while EM currencies have also not moved much since Friday. Equity markets locally have registered a sharp turnaround in the last 3 sessions. Indian bond yields continue to inch higher and now is closer to 7.1%. Market chatter suggests that there is an inflow of $500 mio going through today because of which the market seems to be offerish. I would continue to think that nationalised banks would protect INR appreciation beyond 64.25 levels before Gujarat elections. CMP 64.36, Range 64.25-64.45.
The whole market in the last weak, capitalization of eight of the top 10 firms in the united states rose with the aid of Rs 57,998 crore. the biggest benefit is to HUL and Maruti Suzuki. at the same time, the united states's biggest IT company TCS and HDFC bank's market cap declined.
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