Investors look forward to US Fed policy action, macro numbers

The outcome of US Federal Reserve meeting, domestic macro data and the global market trend will keep investors hooked this week, say experts.

The two-day rate-setting meeting of the Fed will kick off on December 13, which will be keenly tracked worldwide. Talk of a policy tightening has kept emerging markets, including India, on edge as this means a flight of capital to the US.

"We believe the market has already factored in a 25 basis point rate hike. Nevertheless, since the US is the world's biggest economy and a major source of capital for emerging markets like India, something beyond that could bring selling pressure," said Abnish Kumar Sudhanshu, Director and Research Head, Amrapali Aadya Trading & Investments.

That apart, the global market trend and the trading activity of foreign and domestic institutional investors will be a key sentiment driver.

On the domestic front, the government will come out with November CPI inflation on Tuesday while WPI inflation is due on Wednesday.

At the start of this week, the equities will respond to the IIP data, released on Friday. Inflation is going to be the key, Rohit Gadia, founder and CEO, CapitalVia Global Research said, adding that "we hold our medium term outlook as positive".

Proceedings in Parliament's ongoing Winter Session will also be a matter of great interest for market players.

"Among stock-specific news, public sector oil marketing companies will be in focus as they undertake fuel price revision during the middle of this month," said Vijay Singhania, founder-Director, Trade Smart Online, a leading discount brokerage firm.

On a weekly basis, both key indices -- the Sensex and the Nifty -- recorded their best gains since September 2 by rising 516.52 points, or 1.96 per cent, and 174.95 points, or 2.16 per cent, respectively.