Dalal Street likely to remain volatile: Analysts

The Dalal Street is expected to remain volatile this week ahead of derivative settlement and on weak investor sentiment on persisting concerns about the euro zone sovereign debt crisis, analysts said.

"Markets are expected to open on a positive note on Monday tracking firm cues from US stocks, but the gain is unlikely to sustain as investors are cautious and overseas fund houses are continuously pulling the money," Geojit BNP Paribas Financial Services Research Head Alex Mathews said.

Investor sentiments are weak as technical charts suggest to stay away from the fresh buying in the market, he added.

According to brokerage house Sharekhan, "domestic market may remain volatile in the week ahead of F&O expiry on May 27, 2010 and lots of earnings scheduled in the next week that may affect the market."
    
During the week, companies like, Tata Power, Canara Bank, GMR Infra, Hindustan Unilever, Bank of Baroda and Power Grid are slated to announce their financial results.
    
The developments on the global front regarding euro zone debt crises and Foreign institutional investors (FIIs) inflow will be a huge factor to determine the future path of the market, analysts said.
    
The Euro Aid package approval by the German parliament may help bring back some stability in the euro in short-term which in turn may bring some pull back in commodities that have seen a sharp unwinding, Unicon Financial said.
    
"Market is on weaker side but a small bounce back cannot be ruled out in a few coming sessions," SMC Capital V-P Rajesh Jain said.
    
Over the weekend, the Sensex closed at 16,446, lower by 549 points or 3.23 per cent, while the Nifty closed at 162 points or 3.19 per cent down at 4,931.
    
FIIs are withdrawing the money from India and remained net sellers for the third week in a row, selling stocks of Rs 3,860 crore during the week, as per the data available with the market regulator SEBI.
    
However, Mathews said the Indian depository receipt issue of the UK-based lender Standard Chartered is likely to attract good buying from FIIs as well as from some other institutional buyers.
    
The domestic currency posted its biggest weekly decline in nearly 14 years as domestic shares extended losses while concerns remained over the euro zone's growth prospects. The partially convertible rupee closed at 46.95/96 per USD.
    
Over the week the rupee dropped 3.8 per cent. The Indian rupee has lost 5.5 per cent so far in May due to the outflows, and is down 0.9 per cent in the year to date.
    
On global front, all the markets took heavy beating in the past week on persisting concerns about euro zone sovereign debt situation.
    
All the major indices ended the week on a negative note, as US markets slumped heavily compared to European markets and the Asian posting losses over 5 per cent.