Peace in Egypt, falling crude to lift Dalal Street: Experts

After a fall for three successive weeks, the stock markets are likely to witness a relief rally in the coming week on the back of normalcy in Egypt and a correcting trend in global crude oil prices.

The Bombay Stock Exchange bellwether has plummeted by 6.72% or 1,278.92 points in the last three weeks on the macro concerns, including inflation and an 18-day long crisis in Egypt.

But analysts feel military rule after the exit of embattled Egyptian President Hosni Mubarak late on Friday is likely to lift the sentiment on the street.

"The start of the coming week should be on a positive note with the end of the crisis in Egypt. Besides, the market is in oversold zone and all the negative news have been discounted by the investors," Geojit BNP Paribas Financial Services Research Head Alex Mathews said.

The benchmark index Sensex which plunged by 1.55% in the last week, surged by 265 points on Friday, ending the week on a positive note and the experts feel that the recovery is likely to continue in the coming days.

Voicing Mathews opinion, Globe Capital's PMS Head KK Mittal said that the stock markets should respond positively as the situation in Egypt is back to normal.

"Also, ease in the inflationary pressures with the fall in the crude prices to about $85 in the international market and moderating vegetable and onion prices should bring respite to the tumbling market," Mittal added.

Market observers said the headline inflation numbers slated to be announced next week and the third quarter numbers of big honchos like Satyam Computers, Reliance Communications and Reliance Power will also set the tone for the Dalal Street.

However, some analysts opine that the bearish sentiment in the market will take some time to get over.

"Currently, on slight temporary weakening of fundamentals and consequent FII outflows, sentiments have swung to the extremely pessimistic side causing deep cuts across market caps," Emkay Global Financial Services Managing Director Krishna Kumar Karwa said.