Participants will keenly watch fate of GST Bill in Parliament.
After a subdued September quarter results season that saw the Nifty slide 1.2% since the beginning of October till November 23, the markets are now eyeing the winter session of Parliament that kicks off from November 26.
Historically, Parliament sessions under the NDA government's regime in the last 18 months have not been good for the markets.
The Budget session in 2015, for instance, saw the S&P BSE Sensex correct nearly 2,000 points or around 7%.
The Parliament logjam during the Monsoon session, too, saw the benchmark indices slip around 3% each.
So will this time be different, or should one brace for a fall, especially at a time when the US Federal Reserve could raise rates at its meeting on December 15 - 16 that falls during the Parliament's winter session?
With the last session (Monsoon) of Parliament not conducting any meaningful business, analysts say the government will have to adopt an extremely conciliatory stance by reaching out to the Opposition and get some of the crucial pending legislative bills cleared.
Even if the legislative agenda of the government were to face an onslaught of emboldened Opposition, it can unveil many reforms through executive action, they suggest.
"The Grand Alliance's success has galvanised Opposition parties to consider forming similar alliances in other poll-bound states. These results are bound to find an echo in the upcoming Winter Session of Parliament with an aggressive Opposition throwing down the gauntlet at the government," said Ajay Bodke, CEO and chief portfolio manager (PMS) at Prabhudas Lilladher.
As regards key levels, G Chokkalingam, founder and managing director of Equinomics Research & Advisory expects the markets to remain choppy during the course of the winter session of Parliament.
The downside, however he says, could be a maximum of 2% - 3% from the current levels.
"The US Fed hike will take out the element of uncertainty. On the domestic front, the economy is also on the mend and there are a lot of positives, except the bank credit growth. These factors should take the markets higher over the next five months by around 5% - 8%. We believe that in December quarter, the mid-sized would outperform the large-cap companies in terms of profit growth. Hence, we continue to suggest investors to focus on the mid-cap stocks without losing the valuation comfort," he adds.
U R Bhat, managing director, Dalton Capital Advisors says that the markets are already factoring in the likelihood of the GST Bill not getting passed in the upcoming session and expects the markets to remain choppy over the next one month.
"The Land Bill has already been killed and it is now the GST bill that can help left the fortunes of corporate India. However, the nation has done well in the last 68 years without the GST, and can continue to do well without it for the next three-and-a-half years," Bhat said.
Adding: "While there are no expectations as regards the passage of this bill in the upcoming session of Parliament, the markets will be positively surprised if it gets through. The markets are currently pricing in the fact that the bill will not go through in the current session. The worst we can see on the Nifty over the next one month is 7,500 and the upside is capped around 8,250 levels."
