On Friday, markets in america slumped 2% after data from Labor Department showed zero work growth in August, raising concerns that the US economy had been still fragile.
In Asia, Nikkei dropped 1. 7% at 8, 797, Suspend Seng slipped over 2%, Seoul Composite, Taiwan Weighted and Straits Occasions were down over 2% each. Financial and exporter shares had been leading the losses.
Commenting on the status-quo back home, Amar Ambani, Mind of Research, IIFL -India private clients said, "The monsoon has picked up pace previously few days but food inflation has crossed 10%, which is really a cause for concern. The Reserve Bank of India is prone to hike the policy rates by another 25 bps on September. 16. The crucial thing for the markets would be to determine if the RBI signals an end to its tightening period or not. "
The Indian markets advanced over 6% a week ago. According to analysts, some amount of profit booking may come in as the pullback rally can be a bit overdone. Ashish Chaturmohta from IIFL Private Wealth said, "The Nifty future comes with an immediate resistance at 5120 levels, sustaining above, which further short covering is visible. On the downside, 4, 970 holds as an important assistance, if breached can test 4920-4880 levels. "
On the worldwide front, the European Central Bank meeting on interest rates, because of on Thursday, will also be closely watched.