Markets may open gap down tracking losses in Europe as the Greece debt concerns come to the fore. The Nifty futures on the Singapore Exchange declined 64 points, at 5028.
In Asia, markets were trading lower led by losses in financial shares. The Hang Seng and the Shangai Composite index declined over 1% and 2% each. The Japan's Nikkei Stock Average was closed on account of the public holiday.
In India, Emkay in the morning note said, "With most of the Asian indices trading in the red, the Nifty is expected to open on a negative note. Strong support for the index is placed at around the 5000-5020 levels."
Last week, the RBI hiked the interest rates by 25 bps to fight stubbornly high headline inflation. Economists expect inflation to remain at the elevated levels, around 9% until December. Angel Broking the mid-quarter monetary policy review said, "The RBI will preserve its hawkish stance to anchor inflationary expectation and we do not rule out further rate hikes until January 2012."
Over the weekend, Financial Ministers from the Europe met in Poland to discuss ways of handling the debt crisis, the meeting however, made little headway in resolving the banking crisis. There are concerns that the European debt crisis may snowball into a full blown financial crisis, affecting Europe and other countries.
Going forward, markets will take cues from the Federal Reserve Open Market Committee meeting at end of the week. Investors will closely watch for clues on whether the Fed will offer fresh round of stimulus or increase the maturity for bonds.
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Any policy decisions in India on the government front will also be closely watched.
Among individual stocks, GVK Power and Infrastructure will be closely watched after it said it will pay $1.2 billion for buying a majority stake in three Australian coal mines owned by Hancock Group. From the oil & gas space, Reliance Industries, GAIL and ONGC will be closely watched after the government said, it may consider a proposal to benchmark oil prices to average of high and low prices which are prevailing globally.