After last week's sell-off, the Indian market is seen opening little changed on Monday following the release of disappointing employment data out of the United States.
With weaker-than-expected U.S. jobs report weighing on sentiment and European sovereign debt worries resurfacing, most Asian stocks are fluctuating this morning and the U.S. index futures are little changed, while crude prices surged for the first time in three days, rising 1.6% toward $90 a barrel on supply concerns after reports suggested the trans-Alaska pipeline, which carries an estimated 12 percent of U.S crude output, remained shut after a leak.
The euro is trading weak at a fresh four-month low against the dollar in Asian trading ahead of euro-zone government bond auctions this week.
Closer home, with Infosys kick-starting the third-quarter earnings season on Thursday, stock- specific buying activity could help the market find some support. That said, India's benchmark indexes are currently trading at a significant valuation premium to most emerging markets and this could prevent a rally in prices back to recent highs.
Describing India as a player on the global stage, World Bank President Robert Zoellick, who is scheduled to arrive in the county today on a four-day visit, said India's return to high levels of growth is helping the global economy recover from the financial crisis.
On Wall Street, the major averages shed around 0.2% each to close out the week on Friday after the December jobs report showed no marked improvement in the labor market.
The Labor Department said non-farm payroll employment increased by 103,000 jobs in December following an upwardly revised increase of 71,000 jobs in November. Economists had expected employment to increase by about 160,000 jobs. However, the report showed that the unemployment rate fell to 9.4 percent in December from 9.8 percent in November versus expectations for a modest decrease to 9.7 percent.
The benchmark indexes Sensex and the Nifty fell about 4% each lat week on fears that a possible RBI rate hike later this month to check soaring inflation may raise interest rates and increase funding costs for companies.
Also, expensive valuations and net selling by foreign funds last week weighed on sentiment to some extent. Foreign institutional investors sold shares worth Rs. 1,040.74 crore on a net basis Friday, provisional data released by the BSE shows.
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