The market may remain steady to firm on the back of sustained FII buying. But the upside may be capped by subdued to weak trend in Asian markets.
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The market sentiment remains firm due to strong FII inflow, continued strong economic growth data and healthy corporate earnings. A lot of money is said to be waiting on the sidelines to enter the market at correction. Very few got an opportunity to ride the latest rally, it being a sharp and swift rally with the Sensex having risen 10% in a little over a month.
FIIs bought shares worth a net Rs 244 crore on 6 December, the day when Sensex had risen 11 points. Cumulative FII inflow in 2006 has reached $8.4 billion compared to a record inflow of $10.7 billion in 2005.
But mutual funds turned sellers on 6 December. They sold shares worth a net Rs 177 crore on that day compared to their inflow of Rs 398 crore in three trading sessions between 1 December to 5 December.
Asian stocks fell on Friday, with Seoul shares slipping to a near four-week low, while the US dollar was little changed as investors waited for data from Japan and the United States for clues on interest rates. Key benchmark indices in Hong Kong, Japan, South Korea, and Taiwan were down by between 0.06% to 1.4%.
US stocks fell on Thursday as investors locked in profits ahead of jobs data on Friday that could show further weakening in the economy and hurt corporate earnings. The Dow Jones industrial average dropped 30.84 points, or 0.25 percent, to end at 12,278.41. The Standard & Poor's 500 Index declined 5.61 points, or 0.40 percent, to finish at 1,407.29. The Nasdaq Composite Index slid 18.17 points, or 0.74 percent, to close at 2,427.69.
Oil rose slightly to $62.79 a barrel, trading in a narrow range ahead of OPEC's meeting next week to decide whether to cut output further.