The regional markets are expected to trade sideways on low volumes this week, tracking broader investor sentiments on the global financial markets. With the beginning of the local earnings season that could provide markets with a local catalyst still some days away, investors would tread with cautious optimism, say analysts.
However, international oil prices, which continue to be at elevated levels, would limit the downside risks as several countries within the region are major oil exporters and revenue from crude exports form major source of governments’ income.
The global markets have been disappointed with the US Federal Reserve, which has put further quantitative easing on hold until economic situation in the world’s largest economy further deteriorates. With growth in China, India and Europe slowing, the markets fear there may soon be profit warnings from listed companies as global consumer spending and consumption patterns take a turn for the worse.
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