Hello Friends

Markets has been a total disappointment since last 7-8 weeks. We have been receiving back to back bad news since budget 2018 with the introduction of tax on LTCG, widening current account deficit, US markets turmoil after increase in bond yields and the much popular banking spam.

The new financial year (2018-19) starts today and we have a bunch of factors which will be playing a key role in providing directions to the broader market. Let's discuss them individually :

  1. Corporate earnings : Companies will start posting their Q4 earnings data this week which will be detrimental in deciding market directions. Overall the earning season is expected to remain good QoQ, which might help markets stabilize in the shorter term.
  2. Monsoons : Monsoon is a key driver of markets every year in second quarter, with La Nina on the way, the prospects of normal monsoons have improved. Plentiful monsoon rains can therefore lift farm and wider economic growth.
  3. Fed/RBI Meetings : Fed has penned down 3-4 rate hikes in 2018, with one already done, we are yet to witness more rate hikes, however RBI is expected to keep the rates unchanged for the rest of year.
  4. Crude oil : Currently trading around $70/barrel crude looks bullish on charts, however experts expects it to remain sideways for the year. OPEC meetings and production cuts should be closely monitored by the investors.
  5. Elections : We will be having state legislative elections at year end in major states like Rajasthan, Chhattisgarh, Karnataka and Mizoram. Markets are expected to remain volatile during this period.
  6. US Markets : US Markets performance is something which can bring a lot of difference on how Indian markets perform, Fed will be trying its best to maintain inflation and employment data under radar. Trump's policy changes will also be looked upon closely by investors.
  7. Other data points : Investors should also keep an eye on quarterly GDP stats, IIP, CPI, WPI and other data points released from time to time to gauge economic revival of Indian economy.
Traders are expected to keep an eye on these crucial events throughout the year to make appropriate decisions. Talking about the current market scenario, I expect the worst is behind us. Investors/traders should take this downfall as an opportunity we will be seeing trend reversal in markets very soon.

Thanks !!!

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