After a horrendous week for global equity markets, when heightened fear of a global recession led to markets tanking, what will this week bring?
For today, Asian markets are looking to make up some of last week's losses. Markets in Hong Kong, Shanghai, Seoul, Taiwan and Australia opened up a notch, and in early trades, made some moderate gains.
Wall Street futures for Monday are pretty mixed, indicating that markets are still assimilating last week's gut-wrenching volatile trade. Financial sector stocks are trending down, on fears of exposure to Europe, where the shadow of the sovereign debt crisis hangs over the market.
The outlook for Mumbai, based on cues from early Asian trades is for a mildly positive open, although what happens during the trading day is a function of many things.
Some analysts reckon that the imminent fall of Libyan leader Muammar Gaddafi will allow for a ramp-up of Libyan oil production. If that has the effect of driving down oil prices, it could be a positive cue for global equity markets.
But the big event of the week will be the upcoming meeting of the US Fed. There's been some speculation that the Fed could unveil some mild form of Quantitiative Easing, given the downbeat outlook for the US economy. Such monetary easing has in the past proved to be positive for equities in the short run, although over the longer term, when the temporary steroid effect has worn off, markets have slid back sharply to previous levels.
Back home in India, some analysts reckon that the market has fallen sharply enough for long-term investors to consider a re-entry. As Nilesh Shah of Axis Bank told CNBC-TV18, If not now, when will you buy?
Of course, the political overhang from the standoff between Team Anna and the government over the contours of the Lokpal institution is a bit of a drag on market sentiments.
But overall, perhaps a cautious week of trading lies ahead, with markets likely to take their cues from the upcoming Fed meeting.
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Updated Date: Dec 20, 2014 05:31:05 IST