PM holding Finance may boost market sentiment

STOCK & MONEY MARKET OUTLOOK

Prime Minister Manmohan Singh taking charge of the finance ministry as well as positive cues from global markets may boost the sentiment on Dalal Street, said analysts.

“The market should bounce back. Prime Minister has a proven track record of being a good finance minister and with the UPA top guy Chidambaram taking over the home ministry, the investors’ confidence will improve,” Taurus Mutual Fund MD R K Gupta said.

“The market is likely to be stable this week and the first 2-3 days may be range-bound. News of the terror attacks has already been discounted, so stocks are likely to remain in the positive territory, while global markets also recovered in the past week,” said P K Aggarwal, president (research), Bonanza Portfolio.

Analysts believe the extension of the period of special refinance facility for banks by the Reserve Bank of India (RBI) and hopes of another interest rate cut may keep market sentiments afloat this week.

Last week on Friday, the BSE Sensex, the 30-share benchmark index, shrugged off terror attacks on Mumbai by gaining 66 points to close at 9,092.72 points.

However, the tourism sector could take a short-term hit by the terror attacks in Mumbai, with hotel and airline stocks bearing the brunt at the bourses.

Overall tourism, hotels and aviation stocks would be under-performers as the sentiments are negative.

Further, marketmen said a dip in inflation for the third week in addition to a reasonable 7.6 per cent growth of the economy recorded in the second quarter of the financial year may assist domestic bourses to look up a bit more in the week.