Expect a smart Sensex rally this week, say analysts

Expect a smart Sensex rally this week, say analysts

New Delhi: The domestic equity market is likely to a see smart rally in the coming week, driven by robust foreign institutional investment (FII) interest and strength in the global market, say analysts.

Better-than-expected GDP data and easing food inflation helped the Bombay Stock Exchange (BSE) benchmark Sensex gain 4.33%, or 830 points last week to settle a little below the psychological 20,000 mark.

“Market is expected to remain sideways for the first two-three sessions and then continue the rally, especially with firm global markets and FII buying back home in view of the weakening dollar," Religare Securities executive vice-president Rajesh Jain said.

Analysts have also asserted faith in commodities, including metals and crude, who are also likely to trigger the upswing on Dalal Street.

Besides, rally suggests that the impact of scams in the domestic arena, including 2G spectrum row and bribery loan scandal, is slowly fading out of the minds of the investors and that they are regaining their lost confidence in the market, feel experts.

Sensex also rode higher on value buying across sectors and rally in the global peers.

But, experts have cautioned that the US job data released on Friday which failed to meet the street expectations, with the jobless rate jumping to a seven-month high, may act as a dampener.

“Better-than-expected US economic statistics, coupled with the European Central Bank’s decision to extend liquidity support measures to banks underpinned the positive sentiment across risky asset classes. However, the monthly US jobs data will also decide the fate of market in the coming week," IIFL Research head Amar Ambani said.

On the global front, the US markets had ended in a positive terrain with Dow Jones up 19.68 points at 11,382.09 and S&P 3.18 points higher at 1,224.71. European markets also closed firm on Friday.