Stock prices are expected to move in a narrow range this week with limited downside expected, as huge selling of leveraged positions by large hedge funds and exchange traded funds (ETFs) has almost been done. The industrial production numbers, which posted the fastest growth in the last 15 years, are likely to keep the mood upbeat.
However, China’s decision to increase cash reserve ratio for the second time this year by 50 basis points may act as a dampener. The impact of China’s decision was discounted by the Indian market as it was closed on Friday.
Shares of the Rural Electrification Corporation would be closely watched as its follow-on-public offer opens this week. Vascon Engineers and Syncom Healthcare would also be watched as they make their debut on Monday.
The Sensex topped the psychological 16,000-mark and the Nifty closed above the 4,800 level after six trading sessions last week. The Sensex closed the week with a gain of 236 points, or 1.49 per cent, at 16,152.59 points. Nifty closed the week at 4,826.
“The Nifty is likely to touch the 4,900 level. But, it would be difficult for the index to move beyond that at once,” said Siddhart Bhamre, derivative fund manager at Mumbai based Angel Stock Broking. Nifty was last traded at 4,826 level on Thursday.