Market is being driven by the news flow internationally and it is difficult to predict in which direction it will be moving. International flow of news can push the market down even lower to what we have encountered as the news flow is negative but a steady market could also be expected.
Mostly, the analysts are expecting the rate hike cycle to end and a 25 bps hike in the market. But it is also a possibility that the Reserve Bank of India takes a pause to analyze the inflation numbers and how they come out in future.
Liquidity is improving and it is pretty difficult to tell the flow of the market because there is no way of telling whether or not RBI wants liquidity. So at the end of the day, if RBI needs to battle inflation, it should be a good combination of liquidity and interest rates.
There has been a fall in the earnings growth. For this year, the earning growth will be in single digits only. Monsoon has been average which means that the agriculture is taken care of; it can positively influence the inflation. Because the world is recovering from recession now, the year will prove better for India and a good 8% of growth is expected. There may be a decline in the market up to 3% to 5% but it will get stabilize and may even go up. Aldo, next year looks normal for the macro positives are going to work for the country.
Bell The Bull says that an overall better performance is expected from the markets in the near future.