Dalal Street is expected to see range-bound trade this week, as the earnings season is almost over and there are no major positive triggers in sight during the coming days, analysts say.
"The market is likely to trade in a tight range in the absence of any major trigger, though stock-specific actions will keep the buying momentum up. The market has been trading in a range for the last five weeks," Geojit BNP Paribas Research Head Alex Mathews said.
Though global cues are not so strong, the market may open with a positive bias on Monday, with buying support in banking and auto stocks, he said.
Analysts, however, believe that a minor correction can not be ruled out in the coming days, as the Indian market is overvalued in many terms.
"Valuation-wise and from the angle of the risk-return trade-off also, Indian markets are looking slightly vulnerable and are likely to see some downward correction in the short- term," according to brokerage house ICICIDirect.
However, in the longer term, the market is likely to remain strong, as overseas investors are persistently putting their money in local stocks, brokers said.
According to ICICIDirect.Com, a part of ICICI Securities, "The longer term outlook remains strong, with the country's GDP expected to grow by 8.5 per cent this fiscal."
Echoing a similar opinion, Kotak Mahindra Old Mutual Life Insurance Chief Investment Officer Sudhakar Shanbhag said, "India is one of the most favorite spot among the major emerging economies and FIIs will continue to park their money here... That will help the markets to move up in the coming period."
Brokers further said any big development overseas may give some direction to the local markets.
Markets will keep a close watch on US housing statistics and industrial production data and also on Japan's factory output. On the domestic front, wholesale price index (WPI)- based inflation data for July, 2010, is due this week.
Domestic markets touched a fresh 30-month high of 18,287.50 last week, as FIIs continued their buying spree. On a week-on-week basis, the Sensex went up by 23 points, or 0.13 per cent, to close at 18,167.03.
So far in the current month, overseas investors have made a net investment of over Rs 5,500 crore ($1.19 billion) in local stocks.
