Stock markets will focus on global trends for further direction in this holiday-shortened week as the earnings season is largely over, analysts said.
Trade experts expect the key benchmark indices to move sideways as investors are trying to decode the impact of rising inflation on foreign portfolio investments.
Inflation data released by the US and China last week have fanned fears of earlier than expected rate hike and boosted US bond yields.
The US inflation hit a 30-year high level of 6.2 per cent YoY in October. China’s CPI rose 1.5 per cent YoY, while the producer price index rose by 13.5 per cent YoY owing to imported inflation and domestic supply shortages.
Inflation concerns and the possibility an early rate hike can keep local stocks on edge as such indicators tempt foreign investors to pump out funds from emerging markets like India.
Indian stock markets declined for three days in a row last before a sharp recovery on Friday last due to inflation worries.
Despite three days of losses, the 30-share BSE benchmark jumped 619.07 points or 1.03 per cent last week.