Market to stay bearish this week

The BSE benchmark index, Sensex, managed to gain just 67 points last week and settled at 16,415.57 on Friday, while the National Stock Exchange's (NSE) Nifty closed at 4,870.10, up 34 points.

Analysts believe market sentiments is likely to remain bearish in the coming week as the bourses are at a vulnerable stage. Any negative cue from the global market can send them on a downward frenzy.

"This week, the stock market is likely to remain volatile with a negative bias, as foreign institutional investors (FIIs) are on a selling spree in uncertain times. The domestic market can go in for a sharp fall if there is any negative trigger from global markets," domestic brokerage firm SMC Global's Vice President Rajesh Jain said.

The only positive trigger for the markets could be the better-than-expected fourth quarter gross domestic product, which was at 8.8 per cent in the last quarter of 2008 from a year earlier, led by strong expansion in the services sector.

However, analysts are unsure as to how much it would help the domestic bourses to stabilise and restrict the downward slide.

Buoyancy in agriculture has pushed economic growth to 9 per cent, up from 8.7 per cent as estimated earlier, even as the performance of the manufacturing sector has been deteriorating.

Also, in the absence of any major domestic trigger, the market is likely to track the global equities and increase in crude oil prices.

Last week, the market had succumbed to selling pressure as weak global equities and soaring crude oil prices had worried investors. An imminent hike in domestic retail fuel prices owing to the record crude oil prices could further weigh on market sentiments this week, analysts believe.

The government is expected to take a decision on whether to raise fuel prices in the next few days as crude prices hover near $126 a barrel in the global market after dropping $4 on May 29.

Last week, crude prices had touched a record $135 a barrel in the global market.

Meanwhile, according to latest government data, inflation rose to a 45-month high of 8.1 per cent for the week ended May 17. The Wholesale Price Index-based inflation was 7.82 per cent a week ago and 5.3 per cent in the corresponding week last year. However, the stock market seemed to remain unperturbed by surge in inflation and on Friday, the BSE Sensex climbed 100 points.

FIIs continued their selling spree and made a net sale for eight days in a row last week. FIIs were net sellers to the tune of Rs 5011.50 crore in May while in the year, so far, they have sold shares worth Rs 15,369.60 crore.

Domestic mutual funds sold shares worth Rs 387.60 crore in May.

Also, some more companies are left to announce their results such as GMR Industries, PVR, Mcleod Russell, Engineers India, Balmer Lawrie, Berger Paints and Sundaram Fasteners.