Global markets fell during the week as concerns over the weak economic data from the US while the European region debt concerns weighed heavy on sentiments. Global concerns also led to sharp movements in the currencies such as euro, Yen, rupee, etc.

Investors are doubtful about the future of Greece i.e. going for voting for a second time in a fortnight and its ramifications on the European region. In case Greece gets out from the area, then the fears would rise on the fate of Spain, Italy and Portugal.

Rating agency Fitch downgraded Greece rating by one notch sighting political instability and its ability to remain in the Euro area. The slowdown in the Chinese economy is worsening as home prices in 46 of 70 cities in China fell year-on-year.

Consumer demand is falling in China and it is evident from the rising inventory with the car dealers. Back at home, RBI measures proved to be of little help to rescue the rupee from the continuous deceleration.

The deceleration in the rupee has once again raised the upside risk to the inflation as the imports and that of oil in particular would become dearer. To add to this, pass-through of depreciation in the currency and crude prices have been partial so far.

Companies that have resorted to dollar-denominated loans for expansion or import raw material for their products once again would face mark to market losses and consequently would see margin erosion.

At a time when economic expansion is dropping as evident by the meagre growth in industrial production, lower capital formation, drop in the corporate margins, and as such the future with regard to overall growth looks uncertain.

In this economic environment where a cut in the repo rate is warranted, the inflation fear may take the centrestage in RBI's mind as also the government hasn't moved till date to contain the fiscal deficit at the budgeted level.

With deepening crisis in the euro zone, sentiments turned weak in commodities and speculators cut bets on a rally in commodities by the most since November.

The recovery in second half of last week should not be considered as a strong recovery in commodities, as situation is still jittery. Expectation that Greece will leave the euro-zone is increasing fear everywhere. Investors are losing confidence in the longer-term health of the global economy.

Safe haven buying returned in dollar index and it shot up but further rally is looking dicey from here. One cannot deny lower level buying in some commodities viz gold, silver, crude and copper but at the same time we advice quick profit booking.

Apart from development in EU, some economic releases like CPI, Bank of England Minutes and GDP of UK, interest rate decision and Bank of Monthly Economic Report of Japan, GDP of Germany and Durable Goods Orders of US will drive the prices further.