Stock markets likely to be volatile amid Diwali cheer: experts

IIP data and inflation figures are predicted to be a dampener

Notwithstanding the festive spirit, stock markets are likely to remain volatile with the release of industrial output data and inflation figures in the truncated week amid tepid global sentiments, say experts.

Industrial output data for the month of September is scheduled to be announced on Monday (November 12) which will act as a major factor in determining the course for the week.

"The IIP numbers will have its impact on few segments as the numbers are announced on Monday," said Amar Ambani, Head of Research, IIFL.

Experts said despite the cheer around Hindu festivals, markets are not likely to show any major change in momentum as global financial woes and "fiscal-cliff" of the US issues are likely to dominate investment sentiments.

"Sensex is likely to be volatile in the coming week, with a weakish bias, but because of Diwali sentiments are likely to be little better. But global problems and fiscal cliff issues would dominate investor sentiment," Ashika Stock Brokers Research Head Paras Bothra said.

Post the US Presidential elections, the biggest issue being talked about is how the US government is going to tackle the tax issues, Bothra added.

The week would be a truncated one for the equity markets as there would be no normal trading session on November 13 and November 14 on account of Diwali holidays.

There would be a special trading session -- "muhurat" -- trading would be conducted on the Diwali day, November 13, on leading bourses NSE and BSE.

Trading would be conducted between 1545 hrs and 1700 hrs on the day, as per information available with the exchanges. Diwali also marks the New Year for traders as per the Hindu calendar, or Samwat 2069.

Two major companies DLF and Jaiprakash Associates will declare results on Monday.

Another major trigger for the market would be wholesale price inflation and industrial ouput data.

"If inflation figure which is scheduled to come out on November 14, decreases to some extent it is going to be taken in a very positive note by the market. But the chances of inflation figure receding are very low and markets are likely to be under pressure," another expert said.

Wholesale price index-based inflation was at 10-month high level of 7.81% in September.

Disappointing performance from SBI, Tata Steel and ONGC pulled down the BSE benchmark Sensex by 163 points to 18,683 on November 9. During last week the 30-share index lost 71.77 points or 0.38%.