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Quote on Morning Market 12 December 2022 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

This week is crucial for equity markets globally since markets will be keenly waiting for the commentary of the Fed on 14th and that of ECB and BoE on 15th. However, the tone for the commentary of the central banks will be set by the US CPI data due on 13th. If the CPI data confirms a declining trend, the Fed can reaffirm its earlier comment of slowing down rate hikes, which will be interpreted by the market as a departure from the hawkish stance. On the contrary, if the CPI data reflects stubborn inflation, the Fed will have no alternative but to remain hawkish. This will be negative for equity markets. The continuing rally in PSU bank stocks indicates interest in large scale buying in the segment. This segment which was under-owned for almost a decade is now coming back on improving fundamentals and attractive valuations even after the recent run up in prices.

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