Market volatility likely to continue in forthcoming week

The market is likely to exhibit high degree of volatility in the forthcoming week. Lacking a clear direction, the market will dance to the tunes of pace of reforms, foreign fund flows and global cues.

The week ahead is a truncated one as the stock market remains closed on Tuesday, 6 December 2011 on account of Moharum.



The pace of reforms from the UPA-II will be closely watched as both the houses of Parliament were adjourned till Wednesday, 7 December 2011 with Monday, 5 December 2011 and Tuesday, 6 December 2011 being holidays. The deadlock in Parliament over foreign direct investment (FDI) and several other issues continued for the ninth day on Friday, 2 December 2011. The adjournment came after Opposition and certain UPA allies created a ruckus in both houses over FDI in retail. The Winter Session began on 22 November 2011 and is slated to conclude on 22 December 2011.

World stocks saw action after the U.S. Federal Reserve, the European Central Bank and the central banks of Canada, Britain, Japan and Switzerland said on 30 November 2011 they would lower the cost of existing dollar swap lines by 50 basis points from 5 December 2011, and arrange bilateral swaps to provide liquidity for other currencies. Investor focus has moved to a key European meeting on 9 December 2011 to see whether euro zone policymakers will follow through.

Market players will also track US employment figures and a key speech on Friday, 2 December 2011 by German Chancellor Angela Merkel in hopes she might unveil new steps to stanch Europe's escalating debt crisis.