...but stay range-bound next week.
After losing almost 700 points in the last two trading sessions, market experts felt stock market indices could open with an upward gap on Monday. However, they could remain range-bound, with a downward bias, for the rest of the week.
The reason: monsoon worries and China’s growth numbers that are being viewed by experts as a bubble would continue to adversely impact investor sentiment.
Amitabh Chakraborty, head (equity), Religare Securities, said, “While the stock market is expected to open with a positive gap on Monday, there could be some correction after that. The Nifty could fall to 4,450. On the upward side, there could be resistance at 4,700.”
According to him, the global cues were positive. But there were apprehensions regarding China’s bubble growth.
The Bombay Stock Exchange Sensitive Index, or Sensex, plunged 3.25 per cent, or 510.07 points, to close the last week at 15,160.24. Similarly, the CNX Nifty tumbled 3.34 per cent or 155.05 points to 4,481.40 on Friday.
The week started on a good note, when the Sensex closed on 16,000 points. During the week, it slipped, as monsoon concerns emerged. Also, traders booked profits and raised cash for the Rs 6000-crore NHPC initial public offering that opened on Friday. The issue has already been subscribed 3.5 times.
Industry experts were not too worried. They said the profit-booking witnessed during the week was a healthy sign and there could be more sessions like this in the near future. According to Manish Sonthalia, equity head, Motilal Oswal, the Sensex may see a further correction during the next week.
The sectors which could do well in the coming week include infrastructure, realty, cement, auto and FMCG. Nimesh Shah, MD, Fortune Financial Securties, said, “Positive global cues will be favourable for the domestic markets. There was no issue of liquidity but monsoon concerns continue to plague sentiments. Sectors in the fertiliser and hydro power space could underperform next week.”
Market analysts expect more action in the mid-cap and the small-cap segments than the large-cap index.
