Mumbai: The benchmark Sensex that saw its biggest weekly loss in three years may see correction continuing even this week as investors react to tepid macroeconomic data, including factory output, say experts.
Wholesale price index inflation data for November that will come on Monday and developments in the ongoing Parliament session will also influence trading, they added.
Trend in global markets, investment cues from overseas investors, movement of rupee against the dollar, and crude oil price will dictate near-term trend on bourses.
US oil prices have fallen to a fresh 5-year low of USD 57.81/barrel after the International Energy Agency cut its oil-demand forecast for 2015.
“Participants will react to macro-economic data of CPI inflation and IIP, which were released post market on Friday. On the same day, they would be keenly eyeing the release of WPI inflation. Also, markets would be keeping a note of corporate advance tax payment as that would provide clues on Q3 December 2014 corporate earnings,” said Jayant Manglik, President-retail distribution, Religare Securities Limited.
Further, market participants would be keeping a track of development taking place in the ongoing winter session of Parliament, which is set to conclude on December 23, he said.
“Considering the market situation, we expect this corrective move to extend further in the coming week. And, it is important for traders to keep extra caution as stocks are trading quite volatile these days,” Manglik said.
Among global cues, eyes will be on the outcome of the Federal Open Market Committee (FOMC) monetary policy review.
“Movement of index in near-term will consistently remain on further reform initiatives to be taken in the ongoing winter session and WPI data expected to be announced later in the evening,” Vivek Gupta, CMT Director Research, CapitalVia Global Research.
Meanwhile, in its biggest weekly loss in three years, the BSE benchmark Sensex extended its falling trend for the second consecutive week by plunging 1,107.42 points due to all-round selling pressure in view of declining crude prices.
The CNX 50-share Nifty also dropped by 314.20 points or 3.68 per cent to end at 8,224.10.