Amid fears of a slowdown in the global economy, outlook for the capital markets continues to be murky this week, although there could be some gains as stocks are in the oversold zone, say experts.
"The short-term outlook continues to be murky owing to a multitude of problems - both domestic as well as overseas. The sentiment remains precarious," says Amar Ambani, Head of Research, IIFL.
With only three trading sessions this week, experts said there could be some gains at lower levels but it would be difficult to predict from what level the bounce back is likely to happen. August 31 and September 1 are listed holidays for the stock market for Eid and Ganesh Chaturthi.
Shanu Goel, Senior Research analyst at Bonanza Portfolio said, "The intermediate term trend continues to be bearish. Whether this level will be breached is still to be seen but uncertain local as well as global developments continue to cast shadow on the stock market."
On Tuesday, the government will release the first quarter GDP growth data, which will give an insight on RBI's likely stance when it meets on September 16 for its policy review, experts said.
They added that auto and cement stocks will be in the limelight as companies from these sectors will announce from Friday their monthly sales for August 2011.
Extending losses for the fifth straight week, the BSE benchmark index Sensex closed below the 16,000 mark to an 18-month low, losing nearly 2 per cent during the past week due to heavy capital outflows, prompted by negative external and internal factors.
Downgrading of Japan's sovereign debt rating by Moody's, too, weighed on the market.
Meanwhile, US Federal Reserve Chairman Ben Bernanke in his speech to central bankers on Friday in Jackson Hole said, "The Federal Reserve has a range of tools that could be used to provide additional monetary stimulus."
Bernanke said the recovery is likely to improve in the second half of this year, as he sought to reassure investors and the public that US growth was safe in the long run.