Market to remain up on buying support from FIIs

The Indian benchmark indices are expected to gain further ground during the week on the back of buying support from foreign institutional investors (FIIs).

While some amount of financial year-end woes are likely to put pressure on the bourses, market participants feel the seven consecutive weeks of winning streak would continue unabated. Fund managers are also expected to make some fresh purchases in order to pep up the year-end net asset values of their schemes.

Market experts said banking stocks would be in focus during the week, as the Reserve Bank of India (RBI) and finance ministry officials would meet on Monday to decide on the borrowing schedule for the next financial year. The sector has already attracted a lot of investor attention after HDFC, India's largest mortgage financier, announced plans to move its investments in non-core unlisted companies to a special purpose vehicle and sell stakes to private equity investors at a substantial mark-up.

Incidentally, the BSE Bankex gained nearly two per cent in the last week as against a marginal 0.38 per cent gain in the benchmark Sensex.

Auto and cement stocks would also be in the limelight, as the monthly sales numbers would be announced during the later part of the week.

Auto majors have been announcing impressive sales numbers in the last two months. February, proved to be a record month for some of the sector heavyweights.

Last week, while the indices managed to close in the positive territory, the gains were minimal. The benchmark Sensex gained a marginal 0.38 per cent or 67 points.

Market experts feel the trend is likely to be repeated during the current week that would also be a truncated one owing to Good Friday on April 2, when the markets will be closed.

"Markets would look towards the NAV propping exercise and will take some cues from the overseas market," says Arun Kejriwal of KRIS Research. "There is a long weekend and also the financial year ending after trade on Monday. This will impact speculative activity and investor interest. Cues are positive but runaway movement looks unlikely," he said.

Mutual fund managers have been historically known to indulge in fresh buying during the last week of the financial year to boost the net asset values (NAV) of their schemes. According to data available with the Securities and Exchange Board of India (Sebi), MFs have been net sellers in the current month at Rs 3,123 crore.

On the other hand, FIIs have been the prime drivers of the recent gains posted by the indices. According to Sebi, FIIs have been net buyers to the tune of Rs 1,274 crore in the current month in the secondary market. On the other hand, domestic financial institutions have been net sellers at Rs 409 crore as per provisional data of BSE.

Meanwhile, concerns on the global economic front also eased last week after Euro zone leaders, along with the International Monetary Fund (IMF), decided to support debt-ridden Greece by providing co-ordinated loans.