Mumbai: The Dalal Street is expected to witness a positive bout in the week ahead amidst the volatile environment on the bourses driven by global cues even as the 18,000 milestone remains just within the reach, analysts have said.
“Bulls have had a fantastic time so far on Dalal street in the wake of the Fed’s better than expected rate cuts and unabated FII inflows into the Indian equity markets,” domestic brokerage India Infoline said in its weekly wrap.
However, choppiness and sharp swings around these levels are expected ahead of the quarterly results, it added.
The BSE benchmark index Sensex closed at 17,773 points, adding over 400 points in the previous week while remaining within the kissing distance of the 18,000 milestone. It had also touched an intra-day new peak of 17,979.18 points on 5 October.
Analysts also believe that an upswing may be witnessed this week as the US Labour Department data has showed hike in the number of jobs. The US stock markets had shot up in opening trades on Friday after the Labour Department said the economy added 110,000 jobs.
The experts also believe that the stock markets may see an upside in the coming sessions, with stock-specific action based on corporate results, although certain amount of profit booking cannot be ruled out.
“Quarterly results will start coming in this week and they can be a reason to be exuberant or disappointed,” Arun Kejriwal of Kejriwal Securities said.
Factors that would predict market trend in the coming weeks include quarterly results from Infosys and the board meeting of DLF on October 11 to consider overseas acquisitions and raising funds offshore. This would be followed by quarterly results from HDFC Bank and Reliance Industries annual shareholder meeting on 12 October.
“The domestic trigger for the market could be the political standoff regarding the nuclear deal....it would be healthy if the markets would consolidate in the range between 17,000 to 18,000,” Asika Stock Brokers’ Paras Bodhra said.
Foreign institutional investors are favouring the Asian markets, especially China and India, he added. FIIs have made net investments in equities worth Rs9,425.80 crore in just five days till 5 October, while they have bought Rs60,592 crore in 2007 so far.
Besides, domestic mutual funds have sold off equities worth about Rs 532.50 crore in the first week of the month. An increase in annual inflation, based on the wholesale price index (WPI), which moved up 3.42% in the week ended 22 September from 3.23% in the week ended 15 September, doesn’t appear to be a welcome sign, experts said.
The rise in inflation is due to increase in prices of manufactured products, with a 63.75% weight in WPI. Food products like salt and oil became dearer in the week.