US Inflation To Fed Rates: Here Are Key Factors That Could Guide Stock Markets

Siddharth Bhamre, Head of Research, Religare Broking talk to Peppermint and shares views on various factors guiding Dalal Street and other global markets in the near term:

RBI has cleared the way for large companies like CAMS to start online payments. How difficult will the situation be for Paytm and others?,

There are already around 80 payment aggregators, however it is just 3 players that have more than 90% of the current market share. With the payments market growing at a rapid pace, we are confident that CAMSPay will make its presence felt without disrupting the market. This market can easily accommodate one more player without hurting the numbers of the other 3 for now.

Air India has made quite a statement with a big ticket deal. How do you see that changing the sector metrics. What should investors of listed airlines like IndiGo, SpiceJet do?,

This historic order has created a furore across the world. This development only emphasizes that there is still huge potential for growth in this sector. If we look at the cost of flying to income ratio, it has come down drastically in the last decade. Traveling by plane is no longer a luxury. With rising incomes in India, both business and leisure travel is witnessing high growth. Needless to mention, other players will also benefit, as this industry is worldwide multiplayer. However, only those airlines will benefit which will optimally utilize their resources to provide value for money travel experience.

What will be the factors driving the market in the coming days?,

The biggest factor for all markets these days is the US. Is inflation data Different market expectations on US job data as well as interest rate change by FED. With rising bond yields making equities less attractive, global markets are in a range with a negative bias.

Decline in inflation without much growth Useless The data should set a good base for the market to break out of this range. Every other aspect like dollar index, crude etc is dependent on the above for now.

IT and Tech stocks have gained in the recent sessions. Any NASDAQ Connect you want to highlight.

Whenever there are big moves in NASDAQ it affects our IT stocks. With earnings visibility and cost pressures struggling as well, the space is said to have attracted buying interest. We are optimistic about the selected names here.

Banking stocks have not participated in the recent market rally. Is it because interest rates have peaked.

Well, it’s too early to say that interest rates have peaked because it’s not only a function of our inflation but also what’s happening with interest rates in the US markets. When the banking sector and stocks have done well HDFC bank was underperforming. Now we are seeing the opposite of what we consider healthy. The rising interest rate scenario in a medium to high growth environment, which we believe we are in, is a positive scenario for banks. So we will not read too much into the recent poor performance.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to check with certified experts before taking any Investment Decision.