The Indian equities extended losses on Monday with Nifty closing at 5762, near its five-week low of 5741. After declining more than 2 percent on Friday, the domestic indices lost around 2.5 percent each in Monday’s trading, with the Sensex closing at 19,224. Selling pressure was witnessed ahead of the earnings season which begins this week. But, despite sharp declines in equities, the depreciation in the Indian Rupee was comparatively very less on the back of decline in India’s trade deficit. As per India’s Trade Secretary, Rahul Khullar, trade deficit narrowed to $2.6 billion last month, the lowest level in the last three years, from $8.9 billion in November. UK’s House price index fell 1.3 percent in December, much more than market expectations of 0.3 percent decline. In November, house prices had decreased 0.4 percent, as per data released by Halifax. The housing sector in UK is becoming a major concern as prices have been falling constantly month-on-month. Spot gold prices came under pressure in today’s trading session as the US dollar continued to gain. On the MCX, gold prices were trading slightly up due to Rupee depreciation and were hovering at ` 20384/10 gm till 4.00 pm IST today. Strength in the US dollar and mixed sentiments in the global financial markets exerted pressure on the base metal prices today. Moreover, worries of China tightening its monetary policy in the coming days also continued to haunt investor sentiments. Alaskan pipeline, one of the key oil arteries of US, carrying about 12 percent of the country’s production, was shut down for the purpose of maintenance because of a leak on Saturday. This has created supply concerns which helped crude oil prices to gain today. Oil prices gained almost 1 percent on the Nymex and touched an intraday high of $89.82/bbl till 4.00 pm IST today. On the MCX, crude oil prices rallied more than 3 percent and were trading at `4117/bbl around the same time. Outlook We expect base metal prices to remain under pressure on the back of stronger US dollar and on concerns China will increase its interest rates to control inflation. Moreover, worries have emerged that Portugal will be the next in line for a financial bailout. The European equities are currently trading lower on the back of these debt concerns and are expected to further trail downwards. There is no major data to be released from the US today and markets will continue to take cues from news and data on the Euro zone front. But, crude oil prices are expected to trade higher today on the back of supply concerns on account of shut down in Alaska pipeline. Rise in gold prices will also be capped on account of a stronger US dollar.

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