There has been ample drama in the market leaving the Sensex and the Nifty in equal measures of gains and losses. While the Reserve Bank of India is not giving any new relief to NBFCs in the backdrop of the crude oil play, the year-end is bound to one to look out for. In the event of so many parallels, there are 5 major factors that clearly seem to be herding the market.
The US-China Trade Ache
The trade woes between the countries don’t seem to catch a break, furthered now with the arrest of the Technology CFO of Huawei. With the relations of the two countries taking an unpleasant turn, the rest of the world waits in angst to see how the affair of these two major trade powerhouses draws to a close. An unfavourable trade curb on China will have significant repercussions globally.
US Treasury yields signalling a slowdown
With the short-term bonds generating higher returns than its long-term counterparties, there is skepticism amongst analysts with regards to the economy and the course its headed towards. Given such inversion curves with respect to yields have presaged recession in the last four decades of history, the market is glued to the Fed’s next move. It is a particularly uneven ground at the moment with the unemployment rate at its 50 years low and inflation treading high.
The Oil Oscillation
The crude oil price spectrum has been nothing short of a drama unfolding as in the latest Russia led allies to threaten to cut down production from the January. This could mean only one thing – hike in prices in the global markets. Indian being one of the biggest importers of crude oil will be watching closely how the event unfolds as it will directly impact the fiscals back home.
Impact of the Election
Come December 11 and the results of the assembly elections will be out for five of the states. This will be pivotal to the outcome of the general election of next year. There could be sharp corrections in the market depending on how these state elections fare. While elections are often accompanied by market volatility, it will be interesting to see how the economy emerges next year with multiple global and domestic shake-up happening all at the same time.
The Nifty Fluctuations
Nifty has seen some hefty hikes as well as downward spirals in just a matter of weeks. While this is bound to get the investors distressed, analysts opine these fluctuations not be taken too seriously. Despite the expert opinion, one will have to wait on to see which way the market sentiment oscillate.