Dalal Street is likely to witness volatile trade this week with a downward bias, taking cues from global markets as concerns about debt repayment problems in Dubai loom large over markets worldwide, analysts said.
Brokers said the market had trodden into the overbought zone and needed a trigger to undergo correction. Weakness in the street may continue for the next few days, they said.
“The market will remain volatile and trade in negative terrain this week. As investor sentiment is weak in the market, there will be some more selloff,” Geojit BNP Paribas Financial Services’ Head, Research Centre, Alex Mathews said.
The market would now look for some announcement from the Dubai government about how it is planning to deal with the debt crisis, which revived fears of financial meltdown. Global stocks declined last week as investors turned towards the dollar as preferred investment, on concerns over potential debt fallout at Dubai World.
“Indian markets have already felt a knee-jerk reaction of the Dubai crisis. In the short term, although the crisis might keep the market under pressure, going ahead, markets here will take their own direction,” Unicon Financial Chief Executive Gajendra Nagpal said.
The Monday market opening is expected to move from flat to negative and then take cues from the Asian and European markets. Over the week the Bombay Stock Exchange benchmark Sensex lost 390 points or 2.29 per cent to reach 16,632.01 points.