Market Quote 03rd December 2021 By Vinod Nair, Geojit Financial Services
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Below is the daily Market quote 03rd December 2021 by Vinod Nair, Head of Research at Geojit Financial Services
"Concerns over the new Omicron variant, rising global inflation and the FED’s remarks on early tapering continued to drive volatility in the market. Positive domestic macroeconomic data supporting economic growth helped in boosting investor sentiments during the first half of the week. India’s Q2 GDP recorded a growth of 8.4% as economic activity moved towards normalcy after the impact of the second wave. The Union government’s fiscal deficit of 36.3% of budget estimate in October is better owing to improved revenue collection. However, the sentiments were reversed towards the end of the week on growing concerns over Omicron as India reported cases. Fed Chair’s remarks stating a possibility of a faster end to the bond-buying programme and interest rate hike kept investors on edge.
RBI’s monetary policy meeting which is scheduled to start next week will be a key market driver in the coming days as investors await MPC’s policy decision considering the uncertainty surrounding the new virus which persists in the global economy. We expect RBI to continue its accommodative stance with policy rates unchanged while it will continue absorbing excess liquidity from the market through VRRR auctions. The much-awaited decision of the MPC will be on whether they would wait for another session and evaluate the impact of Omicron to decide on a reverse repo rate hike. Major domestic data points awaiting its release in the coming week are November’s Inflation data which is expected to remain elevated and October’s Industrial & Manufacturing Production data"
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