Indian markets are likely to be realigned with the global sentiment. Benchmarks are likely to remain volatile in the coming week with a bearish bias, as the signals emanating from across the shores, particularly the US market, have been negative.

This week, the market is closed for normal trading on November 13 and November 14 on account of Diwali holidays. However, there would be a special trading window between 3.45 p.m. and 5 p.m. on Tuesday on the NSE and the BSE for Diwali.

With the result season being almost over, only cues from the US and Europe will sway market sentiment.

After Barak Obama got re-elected , investors have now shifted their focus to fiscal cliff — a combination of major spending cuts and tax hikes that will automatically take effect early next year unless politicians reach a compromise. According to Bloomberg, the US faces $1.2 trillion in mandated spending reductions and tax boosts over a decade starting January 1. Investors are also watching the latest developments in Europe and how it tackles the debt crisis.

In a move to receive the next instalment of economic bailout, the Greek Parliament last week passed a resolution for a new round of austerity cuts. The €13.5 billionBill, which includes tax rises and pension cuts, was passed despite a huge public protest. The European commission curtailed the forecasts for the Euro economy for FY-13 and even for Germany, Europe’s largest economy, to 0.8 per cent from 1.7 per cent.

“Germany has so far been largely insulated from some of the difficulties elsewhere in the euro area,” European Central Bank President Mario Draghi said last week and added: “But the latest data suggest that these developments are now starting to affect the German economy.”

On the domestic front, industrial output data for September, which is scheduled be out on Monday, would be the one of the major factors that will drive the market.

Only a few major companies have to declare their financial performance for September quarter.

Among them include DLF and JP Associates.

Another major trigger for the market would be wholesale price inflation data.

badrinarayanan.ks@thehindu.co.in

(This article was published on November 11, 2012)
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