Global jitters to weaken domestic sentiment: Analysts

The Dalal Street is expected to be range-bound this week in the absence of any fresh domestic trigger and on developments in the US and European markets, say analysts.

"Most of the corporate results have been announced and as of now there is as no fresh trigger in the market. Tracking global markets, the domestic indices are expected to open with downward bias," Unicon Financial chief executive Gajendra Nagpal said.

On Friday, the US and European stock markets ended in deep red with key indices plunging up to 2 per cent, following reports of a criminal probe into the Goldman Sachs Group by the US market watchdog SEC. Investors are also keenly watching the developments on the Greece debt crisis.

"The developments in Europe and the US remain a significant concern for the market. Domestic markets are expected to move in a range during the week," Bonanza Portfolio vice-president for equities & institutional sales RL Narayanan said.

Analysts, however, said though global cues would be major factor for deciding directions of the domestic market, negative sentiment will be for a shorter span and sustained inflow from overseas fund houses will keep the market shining.

"The outlook for the week is not very strong. The market will see some corrections in the first few sessions, but later it will recover on buying at lower levels," Geojit BNP Paribas Financial Services head for research Alex Mathews said.

In the past week, the Bombay Stock Exchange's barometer Sensex declined 135 points as volatility dominated the market on concerns of the expiry of the F&O segment and on S&P's downgrading of Greece, Portugal and Spain.

"Barring Asia, most of the markets globally ended on a weak note during the week gone-bye, so on Monday, the domestic market may open with negative bias," Narayanan said.

Over the weekend, Dow Jones fell 1.42 per cent, S&P 500 by 1.67 per cent and Nasdaq dropped 2.02 per cent. On Friday, Goldman Sachs shares plunged 9.39 per cent, triggering a sharp fall in other US financial stocks as the SEC began a criminal probe into its recent past. In Europe, Britain's FTSE 100 declined 1.15 per cent to end at 5,553.29 level. Elsewhere in Europe too the markets plunged.

Asian stock markets, however, bucked the trend with Japan's Nikkei rallying 1.21 per cent and China's Shanghai Composite gaining modestly by 0.08 per cent.

"The Asian economy is mainly driven by a strong domestic demand and in that case developments in Europe would not have effect on Indian markets in the long term. But in short0term, the market will react towards these global developments," Nagpal said.