Mumbai: After witnessing muted trading for
the last three weeks, Dalal Street is expected to show a
positive bias this week on strong global cues, analysts said.
"The domestic markets would remain upbeat on positive
developments in the US front. For the first few days the
market could witness a rally and for the rest of the week
optimism would prevail," Unicon Financial Chief Executive G
Nagpal said.
Marketmen feel that a stability in buying might come in
this week after the Federal Reserve Chairman Ben Bernanke said
on Friday that after contracting sharply over the past year,
economic activity appears to be "levelling out" both in the US
and abroad.
"Optimism is in the air as the US and European markets
saw sharp uptrend after Bernanke's statement. The US economy
looks promising and that would have a positive impact on other
economies," SMC Global Vice President Rajesh Jain said.
The analysts believe Asian markets would pick up cues
from the US and European markets which are on an uptrend after
witnessing corrections.
Markets, however, may see choppy trading ahead of the
expiry of the August series Futures and Options contracts on
August 27.
After losing nearly six percent in about three weeks,
the BSE benchmark Sensex dropped further on an weekly basis
and lost over 171 points or 1.11 percent at the end of trade
on Friday.
Nagpal said, "there is no dearth of liquidity in the
Indian market as domestic investors are flush with funds and
retail participation is increasing. Even if foreign funds do
not come into the market, domestic liquidity would hold the
market up."
On Wall Street, the Dow Jones industrial average was up
155.91 points, or 1.67 percent, at 9,505.96 while the broader
Standard & Poor's 500 index rose 18.76 points to 1,026.13.
The gains in Europe and the US came after China's
Shanghai Composite index rose for a second day Friday, gaining
1.7 percent to 2,960.77, after rattling investors worldwide
when it tumbled earlier this week.
Further, investors are optimistic that deficient rains
would not hurt corporate earnings.
"Investors have already discounted the impact of a low
monsoon. Expectations are rife that the situation would not
worsen any further," Nagpal added.
Foreign institutional investors meanwhile kept investing
in home countries and pulled out money from emerging markets.
FIIs were net sellers to the tune of Rs 1,112 crore last week.
"FIIs are sitting on huge profits and there is still lot
of scope for investment in the Indian market. They are likely
to be buyers this week," Bonanza Portfolio Assistant Vice
President Avinash Gupta said.
Bureau Report
First Published: Sunday, August 23, 2009, 11:14