Weekly Newsletter - Jan 2 2011

Well, the markets in India bid farewell to 2010 on a happy note. Overall, the last trading week of the year was pretty good, with the key indices posting solid gains. However, the advance came on low volumes, casting some doubts on the strength of the rally going forward. The start next week may be rangebound and choppy due to the New Year hangover. A few global markets may also remain shut for extended holiday.

But, the week will not be completely devoid of events. We will get the PMI data for both manufacturing as well as services from across the globe. Among the other important statistics to look for will be the monthly US jobs report, FOMC minutes, US factory orders, auto sales (India, US, Japan and China), US weekly jobless claims and Eurozone GDP data.

One should wait for a clear trend to emerge before taking a market-wide call early on in the new year. Keep an eye on the trend in FII fund flows and of course the overseas markets. Going forward in January, investors and traders will look forward to the latest quarterly earnings and the RBI's quarterly review. One should also keep an eye on the political developments ahead of the Budget session.