Markets to Trade Sideways: Why You Should Care

As the year-end festive period begins, stock markets are likely to trade in a range-bound manner due to a holiday-shortened week. The trading activity of foreign investors, currency movement, and global macroeconomic data announcements will drive market sentiments.

Key Factors to Watch

The domestic stock market will be closed on Thursday for Christmas, and several global markets may see subdued activity due to the holidays. Investors will track infrastructure output data, bank loan growth, deposit growth, and foreign exchange reserves. Currency movement and crude oil prices will also be important variables.

Global Market Performance

The performance of major markets, particularly the US, will be closely monitored for directional cues. The re-emergence of foreign fund inflows is viewed as a potential catalyst for the market's next leg higher, improving overall risk appetite.

Market Sentiment

Market sentiment has turned more constructive after lower-than-expected US inflation data revived expectations of further monetary easing by the US Federal Reserve. This environment has historically been supportive for emerging market equities, including India.

Expected Market Movement

Markets are expected to trade in a range with a positive bias, following signs of improving FII participation and a marginal recovery in INR vs USD. Key macro data releases during the week include US and UK GDP, and US consumer confidence data.

Remember, this is perspective, not prediction. Do your own research before making any investment decisions.