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Swift FII nod likely to fuel market

BS Reporter  |  Mumbai 

With the earnings season, the Reserve Bank of India's (RBI) credit policy and the US Federal Reserve's meeting over, global cues, especially the sub-prime credit crisis in the US, hold the key to the domestic stock market's direction this week.
Dealers expect the market to remain volatile over the next couple of weeks on growing signs of a US recession.
However, with faster clearances for overseas investors to register as foreign institutional investors (FIIs) by the Securities and Exchange Board of India (Sebi), experts said they expected the market to rise to new highs on the rush of global liquidity into the fast-growing emerging such as India.
Amitabh Chakraborty, president (equity), Religare Enterprises, said: "We could see the Sensex touching 23,000 and the Nifty hovering around 6,000 by the end of this month. The opening will be strong on Monday, but one can see some profit-booking and correction happening thereafter."
After remaining volatile during the intra-day trade, the Sensex ended up 1.28 per cent to close the week at 19, 976.23 points. The Nifty ended 1.12 per cent higher at 5,932 points on Friday.
Globally too, stock prices rallied after the Fed cut interest rates for the second time this year on Wednesday. But a day later, the gains were erased as the view took hold that further cuts were not on the cards.
With concerns about the credit crunch and losses in sub-prime mortgages refusing to go away, brokerage downgrades knocked several financial stocks in the US.
Speaking at a lecture in Mumbai on Friday, Stephen Roach, chairman of Morgan Stanley Asia, said, "I think there could be a significant correction in emerging market equities that certainly could hit the Indian stock market quite hard."

First Published: Mon, November 05 2007. 00:00 IST