D-Street to remain volatile on Dubai debt woes: Analysts
Mumbai: Dalal Street is likely to witness volatile trade this week with a downward bias taking cues from global markets as concerns about debt repayment problems in Dubai loom large over markets worldwide, analysts said.
Brokers said market had treaded into the overbought zone and needed a trigger to undergo correction. Weakness in the street may continue for the next few days, they said.
"The market will remain volatile and trade in negative terrain this week. As investor sentiment is weak in the market there will be some more sell off," Geojit BNP Paribas Financial Services Head, Research Centre, Alex Mathews said.
The market would now look for some announcement from the Dubai government about how it is planning to deal with the debt crisis, which revived fears of financial meltdown.
Global stocks declined last week as investors turned towards dollar as preferred investment on concerns over potential debt problem fall out at Dubai World.
"Indian markets have already felt knee jerk reaction of the Dubai crisis. In the short term although the crisis might keep the market under pressure, going ahead markets here will take its own direction," Unicon Financial Chief Executive Gajendra Nagpal said.
The Monday market opening is expected to move from flat to negative and then take cues from the Asian and European markets.
Over the week the Bombay Stock Exchange benchmark Sensex lost 390 points or 2.29 per cent to reach 16632.01 points. While foreign institutional investors witnessed a net sell off of Rs 577 crore.
"FIIs have exposure in the Dubai markets. So they were selling their holdings in India. Domestic institutional investors gave some support to the market," Mathew said.
Taurus Mutual Fund Managing Director RK Gupta said, "Indian market movements will depend on how the global markets fare. As no more bad news is coming from Dubai, we can expect some recovery in the Indian markets although the bias will be negative."
Indian markets would find its support around 16,300 levels for Sensex, analysts said.
The US markets on Friday closed in the red with the Dow Jones ending down 154 points or 1.5 percent at 10,309.92 points. The US markets were closed for a holiday on Thursday when other global markets suffered steep losses. On Friday the US markets opened in a shorter trading day.
Besides, Asian markets also closed down on Friday with the Japan`s Nikkei index closing down 3.2 percent and the Hong Kong Sang Seng ended 4.8 percent lower.
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