Market may witness volatility amid global cues
Dalal Street is likely to witness another bout of volatility this week amid pressures from the surge in global crude prices. Weekend Platter
By PTI |
MUMBAI: Dalal Street is likely to witness another bout of volatility this week amid pressures from the surge in global crude prices and settlement in the derivatives segment, analysts say.
The BSE Sensex lost over 700 points in the past week and closed at 16,649.64 points on Friday, while the National Stock Exchange's Nifty index had settled down 78 points at 4,946.55 points.
"These are difficult conditions for the market and the global oil price surge is adding to it...but the 54-55 month bullish market cannot settle down in just 2-3 months of correction as the market needs time for digesting the activity," domestic brokerage firm Bonanza President, Research, P K Agarwal said.
The BSE Sensex lost over 700 points in the past week and closed at 16,649.64 points on Friday, while the National Stock Exchange's Nifty index had settled down 78 points at 4,946.55 points.
"These are difficult conditions for the market and the global oil price surge is adding to it...but the 54-55 month bullish market cannot settle down in just 2-3 months of correction as the market needs time for digesting the activity," domestic brokerage firm Bonanza President, Research, P K Agarwal said.
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Besides, analysts expect the expiry of this month's futures and options contracts on May 29 would keep the market volatile while rollover of Nifty positions from May 2008 series to June 2008 series reportedly stood at 27.50 per cent, as on May 23.
The F&O settlement due on Thursday would ensure volatility to continue in the market this week, Agarwal added.
Although the market has till now discounted rise in inflation to over seven per cent level, but the surge in global crude prices could add to the domestic inflationary pressures.
Inflation for the week ended May 10 was 7.82 per cent, almost unchanged from the previous week's 7.83 per cent, due to a spike in industrial fuel prices, linked to global prices.
A leading market analyst said that the imminent rise in petrol and diesel prices are bound to keep market sentiments subdued this week.
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Last week, the Petroleum Secretary M S Srinivasan had said that a price rise in petrol and diesel rates looks inevitable, referring to Rs 2,00,000 crore under-realisation expected by public sector oil companies this year on sale on petrol, diesel, LPG and kerosene because of the surge in global crude prices.
On the international front, crude oil prices breached a record 135 dollar a barrel level, after the US inventory indicated a surprise drop in crude stockpiles, reinvigorating fears of a worsening supply crunch, marketmen said.
Meanwhile, the Foreign Institutional Investors continued there selling spree in the month with a net sale of over Rs 1,224 crore so far in May, while in 2008 so far, they have made a net sale of Rs 11,582.10 crore.
On a similar trend, domestic mutual funds have also been net sellers in May worth Rs 728.30 crore in equities.
On the international front, crude oil prices breached a record 135 dollar a barrel level, after the US inventory indicated a surprise drop in crude stockpiles, reinvigorating fears of a worsening supply crunch, marketmen said.
Meanwhile, the Foreign Institutional Investors continued there selling spree in the month with a net sale of over Rs 1,224 crore so far in May, while in 2008 so far, they have made a net sale of Rs 11,582.10 crore.
On a similar trend, domestic mutual funds have also been net sellers in May worth Rs 728.30 crore in equities.
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