FED Rate Hike- India Impact Update
Although we do not see any rate hike by FED in Dec 2015 still let us look at various possibilities. First and foremost let’s look at the astro cycle indicators. As per astro cycle indicators FED may announce rate hike but the rate hike will not be effective from Dec 2015 rather it will be effective from Feb 2016, so what the FED does is that it gives the Stock markets and the Bond Markets ample time to adjust to the policy change. FED does know that even doing this will be sort of a problem hence our best case scenario is that they do not raise rates now or in FEB 2016 raise rates once they start seeing inflation stabilizing above 2 percent. We are saying this because around the next 2-3 trading days the astro cycles are showing that most minds on planet earth will be confused. They will not be able to be calm. One moment they will think of one possibility and in a few moments they will then think some other possibility. Hence their minds will not be stable and FED is governed by Humans who have minds so all of them will be in a total state of confusion as to raise rates or not to raise rates, so they might as well say we will raise rates from Feb 2016, quantum of rate hike will be 0.125 Bps so effectively they will give the world assets classes to adjust to the change in policy giving people and fund managers ample time.
If the above does happen then we expect a panic not lasting over 2-5 hours and then we will see all Global Stock Markets moving higher, as the talk to stable economy and predictability in rates will become the talk of the town.
The second possibility is that FED may even say that we could consider raising rates in Feb 2016 and not do anything in Dec 2015. I am sharing my astro analysis very candidly here. I am not God to predict exactly what FED will do but the possibilities are being updated here so that during this time zone of next 2-3 days we could see people hitting the panic button and making wrong decisions. Hence it is very important to be calm and understand the entire scenario carefully.
The third possibility is that FED openly now shifts the parameter to Inflation, having completed the first target of Jobs growth now FED will openly say till we do not see stable inflation above 2 percent we will not raise rates and the FED’s decision will be data dependent.
So what we could see in all three scenarios is a minor panic and then sharp bullish moves.
FED India Impact
FII’s have been net sellers and there is a net outflow for this calendar year and as per our analysis of the data FII’s have moved out part of money they allocated to India during last calendar year also. So when people understand that FED will remain accommodative and quantum of rate hikes will be very low and gradual we FII’s beginning to reallocate money to India and Emerging Market funds and within the Emerging Market Funds India will get a larger share as compared to its peers as India is a net commodity importing country while most others EM’s are net exporters of commodities.
We reiterate our bullish stance for targets of 8800-9000. Buying on dips strategy must be followed.
Good Trading To You!