With a slew of reports on the economic front and sales and shipments data from automobile and cement manufacturers set to pour in over the next few days, the market is likely to see some hectic activity in the coming week (31 December 2012 - 4 January 2013).
The mood may turn cautious at times as the reporting season will unfold soon. The market may well begin the week on a listless note, tracking cues from Wall Street where stocks ended lower on Friday due to worries about the fiscal cliff.
Amid worries about the looming fiscal cliff, the Dow Industrial Average and the Nasdaq composite index punged 1.2% and 0.9%, respectively on Friday.
There were some encouraging data on the economic front, with the pending home sales and Chicago business actitity in November and December respectivey, turning out to be fairly impressive. But there was marked decline in U.S. consumer confidence due to mounting concerns about the fiscal cliff.
Automobile and cement stocks will be in focus and data from leading manufacturers will set the trend. Metal stocks may also attract attention with December production figures providing some clues for the near tem.
On the economic front, India's factory activity in December will be known when Markit Economic unveils the HSBC India Manufacturing PMI on Wednesday (2 January). The HSBC India Services PMI and HSBC India Composite PMI for December will be out a couple of days later ( 4 January).
Besides quarterly numbers from India Inc. that will start pouring in from the second week of January 2013, the central bank's Monetary Policy Review, due to be unveiled later in the month (29 January, to be precise), will render price movements a bit sluggish during the better part of the coming month.
Economic data from the U.S. and China will continue to make a significant impact on global stock markets and the mood on the Indian bourses will also mostly be on tune with global trend.
The Indian market has done fairly well in calender year 2012, despite global economic concerns, but then, with near term outlook for India's economy still somewhat dim what with various agencies predicting a slow pace of growth, the market may see a few corrective spells during the next few weeks.
There could be bright spells for the market ahead of the Union Budget, but investors are most likely to treat noticeable rallies as opportunities to cut down positions to an extent.