Markets are expected to come under pressure on rumours that Dalal Street would be the next terror target after a series of bomb blasts in Bangalore and Ahmedabad last week, analysts said.
“The sentiments may remain subdued and cautious after the serial blasts in Bangalore and Ahmedabad and rumours that the Bombay Stock Exchange (BSE) may be the next terror target,” a market observer said.
On July 25, tremors of the Bangalore blasts were felt at BSE with the benchmark Sensex tumbling by over 500 points as a suspected terror link to the explosions in the country’s IT capital added to the selling pressure.
The fall of 502.07 points, coupled with another 165-point plunge a day before, wiped off close to one-third of what the Sensex gained from a five-day rally, which started on July 16.
“Markets are likely to remain volatile this week amid the quarterly review meeting of the Reserve Bank of India (RBI), futures and options (F&O) settlement and the mixed trend of corporate earnings,” Taurus Mutual Fund Director R K Gupta said.
Besides, analysts expect the RBI to raise the cash reserve ratio (CRR) by up to 50 basis points, which could again put pressure on banking and other interest rate-related sectors. The Sensex gained about 500 points last week to close at 14,274.94 points.
This gain can largely be attributed to the victory of the Congress-led coalition government in the confidence vote in Parliament, sharp correction in crude oil and short-covering of derivatives positions.
For the first time since May, inflation eased to touch 11.89 per cent during the week ended July 12. Besides, a host of companies, including ONGC, L&T, HDFC Bank, Britannia Inds, Dabur and Hindalco are scheduled to announce their first quarter results this week.