Markets See Flat Weekly Close; Global Developments To Be Watched

The Indian markets closed on a positive note this week. The Sensex and the Nifty gained more than 1% each. Despite the positive closing, though, the week has been fairly lacklustre.

At the current prices, the oil marketing companies have an under-recovery of Rs 9.28 per litre on diesel. To tackle the deficit, the government has decided to raise the diesel prices by Re 1 per litre every month for the next 10 months and the price of kerosene by Rs 10 per litre over the next two years. If this materialises, it will bring some relief to the ailing oil marketing companies. The Prime Minister Dr Manmohan Singh has also supported the hike in tariffs by power companies. This may bring in some cheer for the power sector in the long run.

On the global front, the US markets remained closed on December 25th due to Christmas and the European indices remained closed for the first three days of the week. The next development being eagerly awaited now is the outcome of the US ‘fiscal cliff’ on December 31. On Friday, December 28, the European (SXXP) stocks saw a decline on concerns that the US lawmakers will fail to reach a budget agreement within the year-end deadline on measures to avoid a fiscal crisis next year. The US President Barack Obama has summoned both Republican and Democratic leaders to a meeting three days before a year-end deadline to avoid spending cuts and tax increases amounting to a total of USD 600 billion.

Going forward, the market will take cues more from the global factors rather than the domestic ones. A significant one is the outcome of the US budget talks on the fiscal cliff. Any positive development on this front will certainly invoke good vibes in the markets.

In the next week, the first one of the new year, the markets may witness volatile trades with a positive bias. We hope to see the next year ushering in hope and joy for the equity markets as it has in 2012. We wish all our readers good tidings for 2013.