The GST bill is one of the biggest positives for the Indian market . This will make India an integrated market across states . In a nutshell GST will pave the way for increased efficiency and remove bottlenecks for conducting trades in India.
The markets has been expecting this good news and have been rallying in anticipation . We are looking at PE which are high by any standards . However we have to keep in mind the forwards PE may not be that high .
The US job numbers that came out on Friday has been better than expected . The US markets moved up after the good news . This in turn may trigger a rally in Asian markets . All eyes will be on the Fed . Strong growth in jobs may support another rate hike in the near future .
Will the Fed raise rates while all other central banks continues to reduce interest rates in hope of better growth ?
Coming back to India , RBI is expected to keep the rates unchanged this week . As GST is inflationary by nature RBI may need to be more cautious before any rate cuts .
NIFTY and the mid cap rally to continue in view of the positive global and domestic sentiments . As value looks a bit stretched we should be prepared for some profit booking at some point.
Dollar should strengthen supported by strong job numbers .