Stock markets to stay volatile this week on high oil prices

The stock markets are likely to see volatile trend and may undergo consolidation this week in the absence of positive factors, coupled with a steaming crude oil, which rose to over two-year high last week, say experts.

The Bombay Stock Exchange benchmark index Sensex failed to garner investors’ interest and saw lacklustre trading sessions in the week gone by, with the key index gaining 31.06 points, or 0.15 per cent, to settle at 19,451.45 in the previous trading session.

According to experts, the stock market is likely to be volatile as the IIP number for March will be declared on Monday. They also feared that high global commodity prices will add to pressure on profit margins of corporates as high oil prices will fan inflation, leading to higher interest rates.

“Market is likely to be volatile as the industrial production figure for March will be declared on Monday. Market is expected to consolidate ahead of the results,” Bonanza Portfolio Ltd Senior Research Analyst (Equity) Shanu Goel said.

Analysts also voiced that there are not many positive events that could take the market further up from here in the near term.

“On the flip side, there are a few headwinds, especially those emanating from the overseas markets, which could dampen the sentiment,” IIFL Head of Research (India Private Clients) Amar Ambani said. On the local front, attention will shift to earnings. FII inflows and inflation are the other two variables one should keep a close eye on, he said. However, Ambani said the overall bias will stay upbeat due to the renewed pick-up in foreign fund inflows in the Indian equity market. Corporate earnings have been factored in but any surprises will have some stock specific impact, he added.

This week will have two major events which the Dalal Street will closely monitor the industrial production figure for March month and the result season which will be kicked off from April 15 with IT bellwether Infosys Technologies publishing its number on the same day.

“At higher levels profit-booking may not be ruled out on concern of higher crude oil price. Infosys Q4 result will be an important factor to determine the market trend,” Motilal Oswal Securities Associate VP Senior Analyst Technical Equities Parag Doctor said.