Indian markets closed higher for yet another week, with the Nifty finally closing lower on Friday after 5 straight days of gains.

This week was interesting also because, after several months, banking stocks showed some life, particularly SBI and ICICI Bank.

The latter jumped as much as 8 per cent in intra-day on Thursday following an upgrade by Morgan Stanley. State Bank of India also joined in with sharp gains, only to fall back on Friday, as the bank reported losses.

Going into next week, it is going to be turbulent times for the markets, given the huge problems in Turkey.

President Trump said he would double steel and aluminum tariffs on Turkey, deepening tensions over the country's refusal to free an American pastor.

A wave of selling in Turkey's currency was seen with the Lira hitting a record low. The Lira has now lost 30 per cent against the US dollar, since the start of the year. The debt problem in Turkey is also a bad omen, and could pressure other emerging markets. Banks have exposure to Turkey saw their stocks slide, as worries over economic chaos continued.

Last week, Turkish President, Erdogan called on Turkish citizens to convert their hard currency and gold into lira in order to prop up the plunging currency with a "domestic and national stance".

If the situation goes out of control in Turkey, it could worry the banks in the Europe and hence a broader crisis.

Indian stock markets have so far remained resilient to the problems abroad, but, it would be interesting to see the impact of the problems in Turkey. Investors are advised some amount of caution and should stick to quality stocks.

It is also best to stay in some amount of cash, given that the benchmark indices in India have rallied significantly in the last few weeks.

GoodReturns.in