Markets are expected to edge lower in opening trades following weak global cues after US reported disappointing economic data on Friday. The Nifty futures on the Singapore Exchange were down 25 points, at 5,460.
Economists are debating whether US economy may be headed for a double dip recession or a rough patch in the overall recovery. On Friday, the Dow Jones Industrial Average fell -1.42%, breaking the crucial 12,000 level to 11,952, recording it lowest close since March 18.
In Asia markets were trading lower on Monday morning. Japan's Nikkei stock average fell 0.8% due to strengthening Yen and weak economic data from the US. Hong Kong's Hang Seng was down 0.7% due to losses in property and energy shares and China's Shanghai Composite was also down 0.7%.
Back in India market analysts are concerned that the Indian economy may be facing stagflation. Sanjeev Zarbade, Vice President (Private Client Group Research) from Kotak Securities said, "the growth is slowing down even as the inflation remains well entrenched which could lead to “Stagflation.”
Going forward markets will take cues from the May inflation data and Reserve Bank of India's monetary policy this week. The Central Bank is expected to raise rates by 25 basis points to rein in inflation which continues to remain as high as 9 percent. Zarbade said that markets would continue to remain range-bound and may weaken further given ongoing euro-debt crisis, fresh worries on US economic growth and domestic economic risks.
Reliance Industries will be closely watched in the morning session after it said on Friday after market hours that it would Bharti Enterprises’s stake in two joint ventures with France’s AXA.