Oil may rise; banks, look weak

Crude oil contract for August delivery on the New York Mercantile Exchange declined to nearly $16 a barrel this week to below $130 a barrel-mark. The contract, however, rose to over $131 on Friday following reports of a production cut in Nigeria, the largest oil producer in Africa.

Analysts expect oil prices to again fall next week an anticipated drop in demand in the US, the largest importer of the fossil fuel.

Bank shares may weaken next week as investors are expected to pull out on concerns of further monetary tightening on July 29. Most market participants expect RBI to tighten the policy further by either hiking the repo rate or cash reserve ratio or both.

Dealers expect investors to exit frontline bank stocks such as ICICI Bank, and State Bank of India at every dip.

The global crude oil prices are now sharply down from the all time-high of $147.27 a barrel last week. A cool-off in the crude prices eases pressure on inflation.

Inflation for the week ended July 5 was 11.91 per cent, up from 11.89 per cent a week ago.