With Santa Claus knocking on the door, Dalal Street is geared up to gift investors with positive returns this week. Market sentiment is likely to improve in the coming days, analysts say.
“The market may remain positive coupled with good buying sentiment. We can witness some more upside before it gives a pause,” Kejriwal Research and Investment Services Director Arun Kejriwal said.
However, volume is likely to lessen as the holiday season sets in both in the domestic and global markets.
“The trade, though positive, will remain volatile and be driven mostly by domestic buyers. Fresh buying sentiment would be dampened by the holiday season’s sluggish volume,” Ashika Stock Brokers Research Head Paras Bothra said.
Moreover, with the settlement for the derivatives contract (futures and options) scheduled on Wednesday, it is likely that investors would hold on to their stocks as the returns have been fairly good, marketmen said.
“With the market on a gaining spree, investors have added profits to their books as the stocks are trading at one-month highs. With three sessions remaining before the expiry of the derivatives contract, there can be some short-covering in the market,” Kejriwal said.
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Stock exchanges will remain closed on December 25 for Christmas.
Marketmen said the remaining sessions of the current month would witness volatile trading sentiment and only a positive trigger can give a boost to the otherwise sluggish volume. “Investors would hold on till January. With companies announcing their December quarter results next month, it would be a challenging time as some big moves are expected in the market then,” Bothra added.
Also, foreign institutional investors (FIIs) have sold equities worth Rs 2,598 crore in November, continued their investment drive this week.
FII buying in the stock market this December, worth Rs 2,046 crore ($507 million), has almost made good the November sell-offs, according to latest data available on the Securities and Exchange Board of India website.
“FII buying has boosted sentiment this week. Funds are churning their portfolios and with the dollar depreciating against the rupee it is good investing opportunities for the foreign funds,” Taurus Mutual Fund Managing Director RK Gupta said.
Further, domestic bourses can open positive on Monday on positive trends from the Asian markets. “The domestic bourses are expected to remain range-bound, and if the US benchmark index Dow breaches the 9,000-mark during the week, we can expect a decent rally in the domestic market,” SMC Global Vice-President Rajesh Jain said.
Marketmen said with the inflation rate dipping for the sixth consecutive week, the domestic bourses could see some more recoveries. The rate for the week ended December 6 slowed to 6.84 per cent.
Declining fuel prices pushed down the inflation rate sharply — the lowest in nine months — a development that could prompt the Reserve Bank to take more bold steps to boost economic growth.
With banks cutting interest rates, the realty sector is likely to gain and shares would advance on the bourses next week, analysts said.
Last Friday, the 30-share benchmark Sensex settled by gaining 23 points to close at 10,099.91 points. During the week the benchmark index regained the 10,000- level.