Market Ahead, December 21: Top factors that could guide markets this week

The domestic markets continued to hit fresh record highs in the week gone by on the back of positive global cues, US Fed decision and improvement in Indian industrial data. Benchmark equity indices hit new landmarks, with the BSE Sensex crossing 47,000 for the first time, while the Nifty ended at 13,760, less than 250 points away from 14,000 mark.

The global markets would react to US stimulus package wherein the US congressional leaders reached an agreement on Sunday on a $900 billion package to provide the first new aid in months to an economy and individuals battered by the surging coronavirus pandemic, with votes likely on Monday.

However, a new strain of coronavirus has led to the third lockdown in the UK, with European nations imposing travel bans on the country. This might keep investors on edge.

In this backdrop, Union health ministry on Sunday called an urgent meeting of its Joint Monitoring Group, news agency PTI reported. The total Covid count in India has surged past 1 crore mark.

That apart, market participants would also track GDP prints from both US and UK and US jobless claims, meanwhile on the domestic front, market participants would track deposit and borrowing data of Indian banking system for November and RBI's foreign exchange data.

Brent crude oil movement, foreign fund flow and the Rupee's trajectory would also be watched by investors.

Foreign investors have infused over Rs 1.09 lakh crore since November in domestic markets and analysts believe Fed's decision to keep rates unchanged last week will help FIIs maintain a positive view on EMs like India.

And now, let's take a look at the trade setup for today

Asian stocks started the week on a tepid note as investors gave a cautious welcome to news a deal had been struck on a long-awaited U.S. stimulus bill, though “difficult” Brexit talks dragged on with no agreement in sight.

MSCI’s broadest index of Asia-Pacific shares outside Japan dithered either side of flat after hitting a string of record peaks. Japan’s Nikkei 225 dipped 0.75 per cent.

In commodities, oil prices edged nearly 2 per cent lower amid worries over new coronavirus strain. Brent crude dropped 97 cents, or 1.9%, to $51.29 a barrel.

Amid this SGX Nifty was trading 0.46 per cent down at 13,791, indicating a weak open for domestic markets.

Pharma stocks are likely to be in focus today after Finance Minister Nirmala Sitharaman on Friday said investment in research and development in medicine, biotechnology, and pharmaceuticals were the need of the hour.

Besides, Rs 300 crore IPO by Anthony Waste Handling Cell will open for subscription today. The price band has been fixed in the Rs 313-315 range, the firm said.