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Macroeconomic data, auto sales numbers, progress on covid vaccines and the RBI policy would be among the driving factors for stock markets in the holiday-shortened week, say analysts. Indian stocks markets are closed today for 'Gurunanak Jayanti'. During the last week, the Sensex advanced 267.47 points or 0.60%

"Markets remained range-bound last week and finally settled with modest gains. The optimism around the successive vaccine trials and strong foreign inflows boosted the sentiment. However, overbought market conditions combined with the news of rising COVID cases capped the upside. Meanwhile, buoyancy continued on the broader front which kept the participants busy throughout the week while a mixed trend was witnessed on the sectorial front," said Ajit Mishra, VP - Research, Religare Broking Ltd

"This week is a holiday shortened one and participants will react to a list of important data and events. To start with, we will see their reaction to GDP numbers, which were announced on Friday after the market close. On the data front, the auto sales numbers start pouring in from the beginning of the month. Besides, the Markit Manufacturing PMI and Services PMI data are scheduled for December 1 and December 3 respectively. Lastly, the RBI’s MPC will announce its stance on key rates on December 4."

Indications are in the favour of further consolidation in the Nifty index and the probable range could be 12,600-13,100, he said.

"Meanwhile, we expect volatility to remain high due to scheduled data and events. Since the short term is up, the prudent approach is to accumulate quality stocks on dips. Almost all the sectors are participating in the rally but we’re seeing mixed trends within the sector so traders should focus more on the selection of stocks. We feel the recent traction in the broader market will continue but only fundamentally sound midcap and smallcap counters should be preferred for trading or investment," he added.

India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5% and held out hopes for further improvement on consumer demand bouncing back.

Participants would also track development related to coronavirus vaccine.

Asian markets were mostly lower today as a record-busting month comes to an end. Prospect of a vaccine-driven economic recovery next year and yet more free money from central banks have helped global equity markets scale new highs this month.

Federal Reserve Chair Jerome Powell testifies to Congress on Tuesday amid speculation of further policy action at its next meeting in mid-December. (With Agency Inputs)


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