Downward momentum in stocks likely to continue; WPI data key

Downward momentum in the stock market is likely to continue for some more time and trading sentiment would be further guided by announcement of wholesale inflation data tomorrow, say experts.

Market sentiment may also take a hit in view of terror attacks in Paris Friday night, they added.

"Markets to look out for external cues as the domestic result season is over for now. Hopes of a liftoff in the US interest rates and the after effects will make markets oscillate with a downward bias.

"How the government steers ahead with its reform agenda and its implementation thereof will be the key triggers for the bulls to re-enter the markets," said Jimeet Modi, CEO, SAMCO Securities.

Markets last week came under heavy selling pressure due to dismal performance of NDA in Bihar elections. FIIs were in wait and watch mode prior to the elections and are still staying on the sidelines waiting for the magic wand of the economic reforms, he said.

"The downward momentum in the market is likely to continue for some more time," Modi added.

Marketmen said that fears of a rate hike by the Fed next month may continue to hamper investor sentiment.

Earlier this month, US Fed Chair Janet Yellen had signalled that a December rate hike is very much on the table as the economy has performed well.

"Market movement may depend upon trend in global markets, investment by foreign investors, movement of rupee against the dollar and WPI data to be announced on November 16. Fed's decision on interest rate will act as major trigger for the Indian market," said Vivek Gupta, CMT - Director Research, CapitalVia Global Research Limited.

Indian economy is still not out of the woods as industrial production slackened to a four-month low of 3.6% while retail inflation inched up to 5%.

Markets ended in the red for the third consecutive week, where the Sensex slipped below the psychological 26,000-mark to close at 25,610.53, a loss of 654.71 or 2.49%.

"This week will not have many economic data and traders will be taking cues mainly from the global markets. After the disappointing IIP and CPI data, traders will now be eyeing the wholesale price index (WPI) data for October to be announced on November 16 for further cues on economy," said Jayant Manglik, President, Retail Distribution, Religare Securities.

Traders will also be eyeing political development as the Winter Session of Parliament is set to begin on November 26.

Undoubtedly, the recent fall in index has pushed the index majors in oversold zone but there is no sign of reversal yet, Manglik added.