Domestic stock market could continue facing volatility following the emergence of the omicron Covid-19 variant, and its potentially concerning mutation profile. Traders may maintain cautious stance in the near term, with the focus on severity of the new strain, and FII flow in the equity market. 

So far in 2021, foreign institutional investors have sold over Rs 30,000 crore in the domestic equity market. 

On the technical front, the Nifty 50 index's RSI (relative strength index) stood at 44.17. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30. 

On Friday, the Nifty settled below its 50-day, 100-day and 200-day simple moving average (SMA) placed at 17201.49, 17423.69, 17698.19, respectively. 

The Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC) is scheduled to meet during 6 to 8 December 2021. MPC's interest rate decision will be disclosed on Wednesday, 8 December 2021. 

In the previous meeting, MPC kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4%. The reverse repo rate under the LAF remains unchanged at 3.35% and the marginal standing facility (MSF) rate and the Bank Rate at 4.25%. 

On the economic front, India's industrial production data for October will be unveiled on Friday, 10 December 2021. Industrial output in India went up 3.1% year-on-year in September of 2021, easing from an upwardly revised 12% rise in the previous month. 

India's inflation based on consumer price index (CPI) for November will be unveiled on Friday, 10 December 2021. The annual retail inflation rate in India increased to 4.48% in October of 2021 from 4.35% in September. 

On the global front, investors are focusing on monthly US non farm payrolls report for November to be unveiled on Friday, 3 December 2021. The US economy added 531,000 jobs in October of 2021, the most in 3 months as Covid-19 cases dropped and employers offered higher wages and more flexible hours. 

China's annual inflation data for November will be unveiled on Thursday, 9 December 2021. China's annual inflation rate accelerated sharply to 1.5% in October 2021 from 0.7% a month earlier.