Market likely to remain volatile this week

After gaining over 400 points in the last two trading sessions despite being in a volatile phase throughout last week, market experts felt stock market indices could open with an upward gap on Monday. However, they may not escape the volatile trend, with slightly upward bias, for the rest of the week.

The reason: monsoon worries getting subsidised to some extent as rain improved in the country and the poor performance of the Chinese corporates’ results, which have declined by around 20 per cent, would impact investor sentiment.

Amitabh Chakraborty, head (equity), Religare Securities, said, “While the stock market is expected to open with a positive gap on Monday, the rest of the week could continue to see the volatile trend. The Nifty is likely to touch 4,600 but we maintain the range between 4,300 and 4,700.”

According to him, domestic market would follow the global market as overall cues from the US were positive but China continued to be a worry.

The Bombay Stock Exchange Sensitive Index, or Sensex, despite positive rallies in the last two trading sessions, plunged 1.1 per cent on a weekly basis to close at 15,240.83 on Friday, dragged down by the 626-point loss on last Monday. Similarly, CNX Nifty tumbled 1.12 per cent or 51.25 points on Friday to close the week at 4,528.80 against the previous week’s close of 4,580.05.

The week started on a poor note, when the Sensex closed over 600 points down and slipped below the 15,000-mark. The government’s estimates of drought played havoc turning the markets volatile and negative cues from China added further negative sentiments. Meanwhile, Adani Power’s listing at a premium of 5 per cent which later was pared, also disappointed the investors. The later two sessions saw lot of short covering and thereby the market managed to close over the 15,000-mark.

Uday Bhanu Thakur, associate vice president, Srei Capital Market, said, “Monsoon is again on track though it has entered the fag-end, nevertheless worries will get subsidised if rain continues. Kharif crop, to some extent will be taken care of by the late rainfall and for rabi crop, rain will prove good. Market is expected to be positively volatile.”

Market sources said that Sensex may not dip below 15,000-mark next week and mid-cap and small-cap space have value and more actions will be visible in these indices.

Amisha Vora, joint managing director, Prabhudas Lilladher, said, “Market is keen to break out but we are likely to see the similar volatile trend this week too as monsoon continues to be a major driving factor for market movement.”

According to market observers, sectors including realty, auto, IT and finance may continue to do well.