Markets to remain edgy on Goldman, RBI policy: analysts

Markets to remain edgy on Goldman, RBI policy: analysts

Mumbai: The domestic stock market is likely to remain under pressure on concerns of a possible rate hike by the apex bank on 13 April and the lawsuit by the US markets regulator against Goldman Sachs for securities-related fraud, say analysts.

The market is likely to open on a week note reflecting the steep fall on the Wall Street last weekend after US Securities and Exchange Commission charged Goldman Sachs with fraud on sub-prime mortgages, they point out.

“There will be a weak opening for the markets on Monday. It will then look at global cues for direction and is expected to move sideways from there on,“CNI research managing director Kishor P Ostwal said.

Interest rate-sensitive sectors like banking, realty and auto would be watched during the week as any interest rate hike would bring down the shares of the companies in these sectors. “The RBI policy announcement on 13 April will further tighten the liquidity or interest rates, which will dampen markets," HDFC Securities head for private broking and wealth management Vinod Sharma said.

Marketmen, however, expects that the decline will be short-lived and later on buying will emerge at lower levels. The course of the market will be decided by the earnings and guidance by TCS and Reliance Industries. “The market will take cues from the result performances of TCS and RIL which is due to come in the next week and especially the outlook of these companies for the current fiscal," SMC Capital vice-president Rajesh Jain said.

This week the BSE Sensex dropped nearly 2% to close at 17,591.18 points. The barometer index snapped nine consecutive weeks of gains, during which it gained 11%.

On Friday last, the US market regulator had charged investment banking major Goldman Sachs with fraud and causing an loss of over $1 billion to investors by misrepresenting facts about a financial product tied to sub-prime mortgages. Following this, the Dow Jones declined 132 points or 1.13% to close at 11,018.66 and S&P 500 ended down by 1.61% to 1,192.13.

During the week foreign funds put in over Rs10,881.5 crore in the domestic market. So far in 2010, the foreign funds have put in Rs21,887.30 crore in the primary and secondary markets.