Markets in other parts of the world may see a steep fall in trading as many players could extend their year-end vacation. As a result, there is a fair chance that volatility may increase on lower volumes.
The overall outlook remains uncertain, as nobody wants to take undue risks at this stage with only a few sessions to go in the year. Most players will take a call on the market only next year. Though the recent spurt across global equity markets has provided a much-needed boost to the bulls, one cannot rule out another steep fall. It's anybody's guess if the key indices will test October lows again or gradually advance. Much will hinge on the trend in fund flows and how fast the global economy rebounds.
As far as India is concerned, we will need proof that the string of government measures are working. There are reports of a fresh round of stimulus package being unveiled soon, including further easing in monetary policy by the RBI. But, these tend to provide only a brief relief to the market. One will also have to watch out for quarterly earnings and of course the political drama that will unfold over the next few months.
