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| Markets likely to shed gains this week |
| Chandan Kishore Kant / Mumbai Sep 14, 2009, 00:05 IST |
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After last week’s rally, which saw the market gaining 575 points, experts are maintaining a cautious view this week. According to them, the stock market indices could see corrections amid extreme volatility on the back of current over-bought condition.
It is despite the fact that the country’s industrial output growth, measured by the index of industrial production (IIP), grew by 6.8 per cent in July and that the monsoon has revived and covered most of the country.
CNX Nifty gained 149.15 points or 3.19 per cent on a weekly basis to close at 4,829.55 last Friday against the previous week’s close of 4,680.40. Similarly, Bombay Stock Exchange Sensitive Index, or Sensex, crossed the psychological barrier of 16,000-mark last Monday and rallied 575.18 points to close the week at 16,264.30, up 3.67 per cent.
Jagannadham Thunuguntla, equity head at SMC Capitals, said, “Though eventually the markets would go up, some corrections are expected in the short-term.”
Brokers said that Nifty could go beyond 4,900 and strike 5,000 soon but sustaining that would not be easy. They added that a correction of 100-150 points is expected next week in Nifty where as Sensex could slip below 16,000 points.
According to Kishor Ostwal, chairman & managing director of CNI Research, markets are most likely to correct from the current levels. “Market is due for correction in such an over-bought situation. I see Nifty to trade between 4,600-4,800 and Sensex to oscillate between 15,700 and 16,200,” he said.
Though, the latest IIP number are high on a year-on-year basis, on a month-on-month basis it is on the downside. In June, the industry growth was at 8.2 per cent. “This may not help the markets gain strength,” said brokers.
Nimesh Shah, managing director, Fortune Financial Securities, said,” The market may see a movement of 100 points either way.”
The sectors which are expected to perform well include infrastructure, pharma, sugar, IT and capital goods. However, brokers are doubtful about sectors such as oil, metals, fast moving consumer goods (FMCG) and auto for this week.
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