Trading likely to be stock-specific: Analysts

Dalal Street is likely to see trading in a narrow range this week in the absence of encouraging data from international markets and stock-specific action, particularly in ADAG and rate sensitive counters, will be more prominent, analysts said.

The Reserve Bank's surprise rate hike on Friday and fears of another such rise at the central bank's meet scheduled later this month may add some selling pressure in the market, specially in rate sensitive sectors like banking, auto and realty, they said.

"Despite our fundamental domestic economic data, markets are taking cues from global peers these days and in the absence of encouraging economic figures from international markets, Dalal Street is expected to see sideways trade," Geojit BNP Paribas Research Head Alex Mathews said.

Reliance Power (R-Power) and Reliance Natural Resources (RNRL) counters will also be in the limelight on Monday, following today's announcement of a merger between the two ADAG firms, analysts said.

"In past few trades, stock-specific movements are deciding the direction of the market. There may be some minor pressure in rate sensitive stocks for a brief period on RBI action, but energy stocks, which are on a rising streak post fuel deregulation, will push the market upward," Bonanza Portfolio VP (Equities) R L Narayanan said.

The merger news of RNRL with R-Power will attract some buying on the two counters, analysts said.

On the reaction to RBI's rate hike, CNI Research Chairman Kishore P Ostwal said, "It is in line with our expectations and there is no surprise element in it, as the government had already raised fuel prices, adding to the inflationary pressure."

Equity markets in India finished the previous week with a negative undertone. Trading remained volatile throughout the week. On a weekly basis, the BSE Sensex fell by 114 points or 0.7 per cent, while the NSE benchmark Nifty slipped by 0.6 per cent.

"The developments globally have been looking weak but the Indian markets may continue to outperform unless there is any stability in the economic and fiscal situation in the rest of the countries," said ICICIdirect.

Both the Sensex and Nifty have been outperforming all their global peers from a one-month, three-month and six-month return perspective. This can be attributed to the stronger domestic growth prospects, with relatively lower risks.