Waiting for the Booster shot!

The rate hike in US finally happened. As an event that was long expected and widely speculated, it didn’t carry any surprise element. Now that the event is behind, markets will need to focus on how global investors reset their emerging market allocations for 2017. Usually, these allocations start showing in January’s FII flows. The global strategists from stock brokerages will start calling out how funds should plan their strategies. These will be the first pointer of emerging market fund flows. Domestic inflation is set to further fall in the coming weeks. This will be despite a hike in domestic fuel prices. The government will need to come up with a strong signal to revive retail sentiment and reboot consumption. This booster shot should be the next big trigger in the market. The demonetisation exercise will soon draw to a close and the action has now shifted to the tax and enforcement follow though. GST framework is also likely to be finalised in the coming weeks. Overall, December promises to spring a surprise or two in some late policy actions.

“In investing, what is comfortable is rarely profitable.” – Robert Arnott.

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