Domestic News this Week
Key benchmark indices surged to attain their highest level in nearly two years after a survey showed strong growth in both the services and manufacturing sectors in Dec’12. The market sentiment was also boosted after US lawmakers reaching a last minute deal to avert the so called fiscal cliff. The Nifty moved past the psychological 6,000 mark. The market gained in four out of five trading sessions in the week just gone by. The Sensex jumped 339.24 points or 1.7% to 19,784 for the week, its highest closing level since 6th Jan’11 while the Nifty rose 107.8 points or 1.8% to settle at 6,016.15 for the week, its highest closing level since 6th Jan’11. Small-Cap and Mid-Cap indices on BSE, both, outperformed the Sensex. The BSE Mid-Cap index jumped 3.12% and the BSE Small-Cap index surged 3.72%. Meanwhile, India's services sector grew at its strongest pace in three months during December, as company order books filled at the quickest rate since last February, a survey showed on Friday, 4th Jan’13. The HSBC services PMI rose to 55.6 in December from November's 52.1. Services make up nearly 60% of India's economic output. The new business sub-index jumped to 57.1 in December from 54.9 in the previous month. The 50 mark separates growth from contraction and the index has held above that level for over a year now. A PMI survey released on Wednesday, 2 January 2013, showed India's manufacturing activity surged to a six-month high in December, boosted by strong factory output and a spike in new orders.

Markets Next Week
Q3’Dec 2012 results of India Inc is the next major trigger for the stock markets. Investors will closely watch the management commentary that would accompany the result which could cause revision in their future earnings forecast of the company for the current year and or next year. A narrow range is expected as Infosys announces Q3 results on Friday, 11th Jan’13. Axis Bank announces Q3 results on 15th Jan’13. Bajaj Auto unveils Q3 results on 16th Jan’13. HDFC Bank unveils Q3 results on 18th Jan’13. HDFC and Asian Paints unveil Q3 results on 21st Jan’13. Maruti Suzuki India unveils Q3 results on 25th Jan’13. Asian markets expected to react on the influential US non-farm payrolls data for December 2012 which will be released on Friday, 4th Jan’13. On the other hand, telecom stocks could also be in focus as an Indian ministerial panel is due to meet on Monday to discuss the government's plans for the next airwave auction.

Global Markets this Week
US stocks rallied for the week, sending benchmark indexes to their biggest gains in 13 months, as lawmakers passed a bill averting spending cuts and tax increases known as the “fiscal cliff”. All 10 industry groups in the S&P 500 Index advanced in the holiday shortened week. Federal Reserve policy makers said they will probably end their USD85 bn monthly bond purchase program sometime in 2013. Equities resumed gains on the final day of the week as a report showing employers added workers in December at about the same pace as the prior month spurred speculation that Fed stimulus measures won’t end soon. The US wrapped up a third year of employment growth with a gain in December, showing the world’s largest economy was able to endure an intensifying budget battle on Capitol Hill. Employers added 155,000 workers last month after 161,000 in November. The NASDAQ witnessed one of the biggest weekly rally, gaining 4.7%, followed by DJIA (3.8%). European stocks climbed to their highest in more than 22 months, as US reports showed employers added more workers in December and the services industry expanded more than forecast. UK services unexpectedly shrank for the first time in two years in December, clouding the economic outlook as Britain struggles to avoid a triple-dip recession. The CAC 40 gained 3.0%, followed by FTSE 100 (2.7%) & DAX (2.1%) gained 2% for the week. On the other hand, the UK’s opposition Labour Party called for a compulsory jobs guarantee for the long term unemployed, making state welfare payments dependent on paid employment. Asian stocks rose, with the regional benchmark index posting its seventh weekly advance, after the US Congress passed legislation on a budget deal and manufacturing reports from China and the US added to signs of a global recovery. However, China’s services industries’ growth slowed in December, a private survey showed, even as a pickup in new business added to the likelihood that the economy accelerated for the first time in eight quarters. The Hang Seng gained 2.9%, followed by Nikkei (2.8%), Shanghai Composite (1.9%) and Straits Times (1.0%).

Markets Next Week
Investors' "fiscal cliff" worries are likely to give way to more fundamental concerns, like earnings, as fourth-quarter reports get under way next week. Financial results, which begin after the market closes on Tuesday with aluminum company Alcoa. Markets will be concentrating more on the results part, however, there will be some hiccups left with the “fiscal cliff” issue. Though, unemployment rate remained somber yet the job growth wasn’t that fast. The Bank of England policy makers is expected to maintain their bond-buying program next week as new efforts to boost credit begin to show results. On the Euro debt crisis, the prospects for most of the Euro zone’s periphery remain dark as we feel; there is just a glimmer of hope. Investors and markets are optimistic to the belief that the tide will be over by CY’13. Asian markets to remains buoyed by the inflows. However, markets are at their peak and have chances of bottoming out.