India’s Sensex is expected to be range bound on Monday as investors are likely to remain cautious with other major Asian markets closed for the day.
Markets in Japan are closed for National Foundation Day holiday. Also, markets in China, Hong Kong and South Korea are closed for Lunar New Year day holiday.
On Friday, the US stocks rose as investor sentiment turned positive amid encouraging economic indicator indicating that the growth of the world’s largest economy is reviving. According to the data released on Friday by the the Bureau of Economic Analysis, the trade deficit, which measures the difference in value between imported and exported goods and services over the reported period, fell to $38.5 billion in December from $48.6 billion in November.
The Dow Jones Industrial Average rose 0.35 percent, the S&P 500 Index was up 0.57 percent and the Nasdaq Composite Index gained 0.91 percent.
On Friday, the Sensex fell 95.55 points to close at 19484.77. The overall market breadth was negative with 763 advances against 1397 declines. The BSE's Midcap Index dropped 0.72 percent to 6756.01 and Smallcap Index declined 0.95 percent to 6794.14.
Sensex was down 1.5 percent last week. Investor confidence was weighed as the government released a statement last week that India’s gross domestic product was estimated to grow at an annual rate of 5 percent in the 2012/13 fiscal year. Earlier, the finance ministry had projected the economy to grow at 5.7 to 5.9 percent during the year. Market players felt that the downturn in industrial production and weak export orders would continue to hamper India’s economic growth.