Mumbai: Investor sentiments are likely to remain subdued this week following the surge in the global oil prices and the fall in the rupee against the dollar, analysts say.
The 30-share BSE benchmark Sensex plunged over 750 points last week and settled at 16,737.07, while S&P CNX Nifty feel nearly 100 points to close at 4,982.60 Friday.
Analysts believe the markets may again feel the bear pressure if crude oil remains at record high levels and inflation figures do not improve this week.
Oil rallied to a fresh record of $124.61 a barrel on 9 May as strong diesel demand outweighed signs of rising Opec supplies, while the domestic currency has weakened to 41.76 against the greenback on Thursday.
“The bears are rearing their heads further and threatening real hard,” a report by domestic brokerage Sharekhan stated, adding that Sensex would now first head straight for 15,300 levels, which is a critical support. A break below would accelerate this fall and targets can be pegged at support level of 14,500, it added.
However, marketmen believe the release of industrial production data may provide help in providing some positive trigger, while global cues might also provide some direction to the domestic markets.
Global rating agency Standard and Poor’s positive outlook on health of the Indian bourses brought a ray of hope for traders and investors.
S&P’s managing director and region head South and South-East Asia R Ravimohan on Friday said volumes in the bourses have started returning and it would soon revive discounting any direct impact of the US slowdown on the stock markets.
Also, the corporate results announced so far have been more or less in line with market expectations, which provided the a positive direction to the market last month. However, a host of companies are still left to announce their results this week.
The firms that are scheduled to announce their quarterly results next week include Unichem Laboratories, Blue Star, Indiabulls Real Estate, Gail (India), Mercator Lines, Punjab National Bank, Voltas, SAIL and Bank of India among others.
Meanwhile, inflation still remains a major concern and obstacle in the domestic growth and experts believe high inflation may compel the government to take more fiscal measures to rein in prices in addition to slew of measures adopted recently.
WPI-based Inflation had risen to a nearly four-year high of 7.61% for the week ended 26 April due to rising prices of tea, spices, fruits, vegetables and some manufactured products. It was 7.57% in the week before and 6.01% in the year-ago period.
Besides, Foreign institutional investors (FII)s have remained net sellers in equities in the May so far with a sale of Rs118.40 crore so far. While in 2008 so far, they have made net sales worth Rs2,686.10 crore. On the other hand, domestic funds bought shares worth Rs15.90 crore in first few days in May.