Sensex, Nifty to open on a weak note

The short term outlook for market remains negative till Nifty trades below 7540 levels. The current downfall could extend up to 7250-7200 levels. The mid-cap and small-cap stocks which were out performing till the previous week are also showing signs of fatigue.

The world economies and markets will be afraid after China’s economy slowed down to a 25-year low clocking growth of 6.9% in the fourth quarter of 2015. The markets which are already on tenterhooks have one more reason now to stay subdued. During the day, the World Economic Outlook from the IMF is expected. The usual noise from Davos will also be heard. Among the big numbers, RIL, HCL Tech and Reliance Power will be in focus.

The outlook is a weak start. Asian markets are flat for now. The short term outlook for market remains negative till Nifty trades below 7540 levels. The current downfall could extend up to 7250-7200 levels. The mid-cap and small-cap stocks which were out performing till the previous week are also showing signs of fatigue. We see further pain here. The main indices could always twist around after a weak start as has been the case. However, any short-term pullback must not be seen as an end to recent woes. India’s Dec trade gap has risen 27.1%yoy to $11.7 bn. The weather could cause issues with winter being milder. Oil prices have hit lowest level since 2003. Though it should be good news for the country but collateral damage could mean less inflows and remittances into India.