Dalal Street is likely to carry forward the upward movement this week as risk appetite is returning to the markets on the back of a strong domestic economic scenario and strengthening global cues.
"In the past few sessions, the market has shown good performance and it seems the confidence level among investors is returning as sentiment across the globe is positive for now. The domestic market is likely to start with a positive bias this week," SMC Capital's Equity Head J Thunuguntla said.
During the last three trading sessions, the 30-share BSE benchmark Sensex rallied 448 points, or 2.6 per cent, thus trimming the losses for the past week to just 0.3 per cent.
"After being beaten heavily on European debt worries, the market is now cheering positive news coming in from all fronts and on Monday, the Dalal Street is likely to trade in the green," Bonanza Portfolio AVP (Equity Research) Avinash Gupta said.
The market sentiment is positive due to many factors. The country's industrial output for May expanded much faster than expected at a full 17.6 per cent, the second best ever.
On the global front, the European Central Bank and the Bank of England left thier benchmark rates unchanged again to support the feldgling economic recovery, China's exports jumped to a 48 per cent in May and Japan's gross domestic product rose at an annualised 5 per cent in the first quarter.
"But,investors are cautious and it is unlikely that they will miss any chance to book profit at higher level, which may bring more volatility into the street," Thunuguntla added.
FIIs, which offloaded shares worth $2 billion in May, were net buyers last week and so far in June they have made a net investment of Rs 1,576 crore in the market.
Investors will eye the first installment of the corporate advance tax payment (which falls due on June 15) which will give some clue about the June quarter corporate results. They will also consider the May inflation data due on Monday.
However, global risk appetite holds key for the domestic equities in near term. "At the current levels, though the market valuations do not look very expensive, with lack of fresh triggers except IIP, the upside seems to be limited," Indiabulls Securities said in a note.
Analysts also said movement in the market heavyweight RIL that acquired Infotel on Friday, will be key. Also, SpiceJet would be another scrip, which investors will be watching on Monday. On Saturday, media baron Kalanidhi Maran of Sun Network, announced acquisition of 37.75 percent stake in the low-cost airline. He will make an open offer for 20 per cent additional stake on Monday. "But if the open offer is made at Friday's rate, stock is unlikely to move up," said a broker.
On the oil sector, Unicon Financial said, "Reports suggest that the EGoM on oil will meet on June 17 and that could bring interest into oil companies again."
Over the past week, major global markets edged higher on short covering and some easing concerns over the European markets. Dow and Nasdaq gained over 2 per cent, while European markets gained marginally during the week.
