The US-China trade relations, the US Fed's interest rate stance, crude oil prices and movement of the rupee will set the tone for the equity markets this week, say experts.e will set the tone for the equity markets this week, say experts.

With state elections out of the way, and the quick appointment of the new RBI governor, the markets may also see a relief rally on expectations of more measures to ease the liquidity situation, some analysts said.

“The market is showing an impression that it had factored the election outcome. Softening CPI inflation at 2.33 per cent (November) and pick up in industrial production to 8.1 per cent in October and the likelihood of a change in RBI’s stance from ‘calibrated tightening’ to ‘neutral’ will add optimism to market participants,” said Vinod Nair, head of research at Geojit Financial Services.

On the global front, the Federal Reserve’s FOMC (Federal Open Market Committee) meeting is scheduled during mid-week, which will give clues regarding the US central bank’s rate trajectory for 2019. Participants, experts added, will also track the US-China trade relations. Crude oil prices have dropped despite Opec and Russia agreeing to cut oil production from January 2019, mainly due to increasing US shale oil output.