Cautious week ahead for markets

Good morning and welcome to a new week! On Friday, the markets across the US and Europe saw a blistering rally on the back of strong US jobs data rally. However, the strong rally in the western world is less likely to inspire the bulls on the D-Street, as Asian peers are signaling mixed sentiments on Monday morning. Even the SGX Nifty is trading flat in early trades today. This week, caution may become the buzzword for investors, as a host of data and key data points, such as IIP and CPI numbers, are scheduled to be released in the domestic markets. Meanwhile, the Fed outcome is scheduled from the West. Concerns are mounting for Mr. Market as, after a rate cut pause and revision of GDP forecast from the RBI, the FPIs have turned their back to the Indian markets and its quite evident from the numbers. In the first week of December, FPIs have emerged as net sellers to the tune of nearly Rs. 3,858 crores in cash segment.

All-in-all, the week is likely to remain cautious for the markets with too many key data points up for grabs. We would advise market participants to be careful and avoid aggressive positions and approach markets on a highly selective note.
 
The Asian markets have been seen trading mixed on Monday. Nikkei 225 and Hang Seng are trading in the green while China’s Shanghai Composite and Straits Times were seen trading dull. 
 
Back home, Friday turned out to be a dismal day of trade for the markets, as the benchmarks lost nearly a per cent and settled near day’s low. The Nifty ended down 97 points at 11,922 and the Sensex closed down by 334 points at 40,445 levels. The selling pressure was more severe in the broader markets, with Nifty Midcap and Smallcap losing 1.46 and 0.95 per cent, respectively. Talking about the sectoral performance, selling was witnessed across the broad, wherein Nifty PSU Bank and Nifty Media lost the most.
 
On Wall Street, the final trading session of the volatile week turned out to be a stunning one as market participants pressed the buy button and triggered hectic buying in stocks from across various sectors after the report showed that the US economy added 266,000 jobs in November. At the end of the session, Dow surged 337 points to close above important psychological 28,000 mark, the S&P 500 rose 29 points to end at 3,146, and the NASDAQ Composite jumped 86 points to settle at 8,658. The European markets too turned positive, as major indices, that are, UK’s FTSE 100 gained 1.43, France’s CAC 40 advanced 1.21 per cent, and Germany’s DAX ended up 0.86 per cent.